Political uncertainty over Brexit is weighing on business investment, which has fallen to the lowest level for a year, a survey indicates.
The research, from manufacturing body EEF and accountancy advisers BDO, said the outlook for UK manufacturers was “slightly more subdued than it has been for some time”.
The poll of more than 300 firms found they were “cautiously optimistic”.
However, the EEF said growth was looking “fragile”.
“Manufacturers are still seeing a positive picture and business confidence indicators are holding up looking forward to the second half of the year,” it said.
But it pointed to “the easing of global growth” and suggested that “the continued political uncertainty of Brexit negotiations is weighing on investment”.
EEF chief economist Lee Hopley said: “We continue to see signs of growth across manufacturing and, given weaknesses elsewhere in the UK economy, it is vitally important that we sustain this.
“However, the durability of this upturn is looking somewhat more fragile as many of the positive forces driving expansion last year, such as a resurgent eurozone, a surge in global manufacturing investment and competitive pound, are starting to fade.”
Ms Hopley added: “New or heightened uncertainties have also come into play, not least what feels like crunch time in the Brexit negotiations, which have led to amber lights flashing again on the business investment outlook.
“This matters both for growth now and our longer-term productivity prospects.”
BDO’s Tom Lawton called on the government not to “lose sight of the needs of manufacturing, or indeed the wider economy, during the continuing EU negotiations”.
He added: “I have no doubt that UK manufacturing will continue to be successful, but the right support and trading environment will make a huge difference to manufacturers.”