It came as fears over a global trade war and rising taxes hit firms.
Output was down 1% in the first three months of 2025 after a 20% rise in the quarter before, with UK orders dropping 7%, Made UK data show.
The industry body said: "Albeit the sector-wide contraction is only minor, the negative balance at the start of a year is an ominous one."
It is now forecasting that the manufacturing sector will contract by 0.5% this year, down from a previous forecast of -0.2%, before growing by 1% next year.
The sectors hit hardest by the fall in output this quarter have been basic metals, which reported a 50% drop in production, followed by electrical and metal products, which fell 12%.
Recruitment intentions in the sector also dipped, falling from an 8% increase to a 3% decline, with half of companies freezing recruitment.
Much of the dip in employment was attributed to measures announced in the Budget, with 41% of firms reducing planned pay increases and a quarter considering redundancies.
Fears over a trade war caused by US president Donald Trump have also shaken internat...
Output was down 1% in the first three months of 2025 after a 20% rise in the quarter before, with UK orders dropping 7%, Made UK data show.
The industry body said: "Albeit the sector-wide contraction is only minor, the negative balance at the start of a year is an ominous one."
It is now forecasting that the manufacturing sector will contract by 0.5% this year, down from a previous forecast of -0.2%, before growing by 1% next year.
The sectors hit hardest by the fall in output this quarter have been basic metals, which reported a 50% drop in production, followed by electrical and metal products, which fell 12%.
Recruitment intentions in the sector also dipped, falling from an 8% increase to a 3% decline, with half of companies freezing recruitment.
Much of the dip in employment was attributed to measures announced in the Budget, with 41% of firms reducing planned pay increases and a quarter considering redundancies.
Fears over a trade war caused by US president Donald Trump have also shaken internat...
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Daily Express (Digital) - 1 Issue, March 18, 2025