Output figures released this week by the Engineering Employers’ Federation showed the first rise for 18 months.
But the EEF warned that the recovery is fragile and is restricted to certain regions and high-value industries.
The quarterly Engineering Trends survey found 34% of companies had increased production over the past quarter, while 30% reported a decrease. Orders increased slightly, but exports, capital expenditure and employment levels continued to decline.
EEF economist Dougie Peedle said: `It is encouraging that orders and output have risen. What we need now is a period of stability.’
There were strong regional differences, with the largest output rises in the south of England and Northern Ireland. The east Midlands, Yorkshire and the north east all saw output fall.
`The regions with a traditionally strong engineering base are doing worst,’ said Peedle. `Aerospace and electronics companies are doing better and there are more of those types of companies in the south of England.’
The EEF predicts manufacturing output will grow 1.8% in 2000, after a 0.7% drop this year.
Rising productivity should mean employment levels will continue to fall next year, with a further 60,000 job losses on top of 160,000 this year.
Figures from the Office for National Statistics released on Wednesday confirmed that a modest recovery in manufacturing is under way. Production was up 0.5% in August, the second consecutive monthly rise.