British manufacturers' confidence deteriorated slightly in July but companies said they expected to start raising output again next month, surveys from Britain's main employers' group showed yesterday.

The Confederation of British Industry's quarterly survey's business situation balance deteriorated to -16 in July from -15 reported in April. That was the fourth consecutive negative reading but still better than the -22 recorded in January.

The monthly manufacturing order books balance rose to -20 in July from -25 in June and against forecasts of -23. And companies expected output to rise next month for the first time since April, with that balance rising to +6 from -5 in June.

"While the results don't point decisively in one direction, I am relatively optimistic that the manufacturing sector is in the process of finding its feet," said Philip Shaw, chief economist at Investec.