That is the conclusion of a new report by the Confederation of British Industry (CBI), which found that new orders fell for the second quarter running in the three months to January.
However, smaller firms are expecting new order numbers to grow in the next three months as the domestic market improves.
Anna Leach, CBI's Head of Economic Analysis, explained that the report does show falling production across the quarter.
"Nonetheless," she explained, "better news on the domestic front is expected, with output and domestic orders set to rise modestly. But there is little sign of improvement in export prospects, and uncertainty over demand continues to weigh on investment plans."
Meanwhile, the Recruitment and Employment Confederation found in its latest JobsOutlook report, published last week, that half of firms are looking to increase their permanent employee hiring over the next 12 months.
Posted by Thomas Fletcher