"Printers recognise that conflict in Iraq even talk of it could seriously undermine business confidence and affect the industrys short-term prospects," its latest quarterly Directions survey said.

It also found that printers feared "severe" and "adverse" effects on trade if war edged closer.

Directions said that, although the trade had expected a good summer, very few printers had seen an improvement.

"Against a background of volatile stock markets and fragile business and consumer confidence, the modest expectations printers had for the summer were disappointed."

As it is, three quarters of printers are working below capacity, compared to 79% a year ago.

But a plus-67 balance expected business to take off in the traditionally busy festive period barring a Christmas presence from the US in Baghdad.

And though only a plus-5 balance saw domestic order volumes increase in the last three months, many expected healthy books for the next three months.

The survey also highlighted that printers have faced "hefty increases" in their insurance premiums during the year.