THOUSANDS more jobs are likely to be lost as optimism among UK manufacturers over exports fell at the quickest rate for nearly three years, new figures have suggested.

The survey, by the Confederation of British Industry (CBI), estimated that a further 29,000 manufacturing jobs will go between July and September this year.

The CBI's latest quarterly regional industrial trend survey, which described the cuts as "severe even by UK standards" said they would affect all the regions, with only the South-West and Northern Ireland likely to avoid job losses.

In the North-East, the survey found overall business confidence fell for the fourth survey in a row, highlighting the damage done to the regional economy by the strong pound.

Employment is expected to fall rapidly in the next four months. The CBI estimates about 2,000 job losses in the region between July and September.

Yorkshire and Humberside fared little better, with export optimism falling. It may lose 3,000 jobs in the same period.

Sudhir Junankar, CBI associate director of economic analysis, said: "The global slowdown is now hitting UK manufacturing hard, with firms in virtually all UK regions experiencing falling orders, output and employment with severe pressure on profit margins."

He said the findings suggested last week's interest rate cut was "clearly justified" and further interest rate reductions may be necessary if consumer demand weakens and service sector growth eases further.

More than a third of firms surveyed said they were negative about employment prospects, with just nine per cent saying they were positive - the weakest expectation since January 1999.

Overall, UK business confidence continued to fall, with 22 per cent of firms being less optimistic about the general business situation, although the fall was slightly slower than in April when sentiment was affected by the foot-and-mouth crisis.

The decline in confidence is also spreading to Northern Ireland and Scotland.

Peter Gutmann, associate director of business strategies, said: "International developments are making life very tough for manufacturers. The pound's persistent strength and weak global demand accounts for widespread further falls in confidence in the current survey.

"Previous resilient regions are experiencing the pain as much as traditional manufacturing areas as the down-turn has affected new technology sectors.

"With traditional sectors still struggling and high-tech output falling back, employment is bound to fall further in virtually all regions."

Plant and machinery investment intentions over the next 12 months were negative in all regions except Wales.