This appears to reflect a big spike in the cost of raw materials and oil, which have been the highest in the country and have left firms struggling to pass them on to customers, according to the regional trends survey published by the Con- federation of British Industry and Experian.
The number of companies citing the cost of finance as a constraint on their plans has also increased noticeably, said the report.
Despite these setbacks, the volume of new orders picked up and investment intentions are less downbeat than for the country as a whole.
Nationally, optimism has slumped in every region, with cost pressures remaining intense and manufacturing activity expected to slow.
However, the manufacturing sector is being boosted by the pound's weakness against the euro, which is helping exports.
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