I made +20% smithing enchantment ring and necklace, and it had no effect in improving the equipment(i tried it with and without the ring/necklace). I think +40% should have had at least SOME effect but not even a difference of 1 point.

I think its a pretty serious bug and needs to be given attention in next patch. Thanks

Is it just your +20% that doesn't work? Have you tried less?

I have +11% and it works fine.

Do you have any mod installed that can mess with this?

I've never installed any mod on skyrim, No i havent tried it with any less, but dont get the point behind it even if weaker enchantment works.

At some point, you will need more and more % to just increase the damage with a tiny bit, it's a logaritm I believe. At one point it will increase infinitely small, but never reaches the next point. If you can get level 100 alchemy, you can make some nifty blacksmithing potions with, I believe +130% smithing. Those give that final push for extra damage, but only if you ALSO have the smithing jewelry.