Figures out this week from the Engineering Employers’ Federation have shown a glimmer of optimism from hard pressed manufacturers, with trends in exports and output showing early signs of improvement.
But forecasters at the EEF are still anticipating a further 50,000 engineering job losses by the end of the year.
The latest Business Trends Survey, published on Tuesday, showed that engineering output volume had moved up from its low point at the end of last year, with its second successive quarter of improvement.
The EEF lodged the findings with the Bank of England’s Monetary Policy Committee in advance of yesterday’s interest rate decision, but was careful to avoid talk of recovery. `This is not to say that things are getting better,’ an official said. `But they are not getting worse as fast as they used to.’
First signs of recovery in Asian markets, with continued demand in the US and stronger performance in Germany and Italy have contributed to improved export performance.
Engineering employment has continued to decline for the fifth successive quarter, with a further 50,000 jobs expected to go within the next six months. Three times as many companies are laying off staff as are hiring them, the report reveals, and the number of vacancies in engineering has fallen 25% in the past six months.
`We could be heading towards a baseline employment figure in engineering of about 1.65 million, below which it will be impossible to go without companies actually shutting down,’ said John Nutton, partner at accountant Robson Rhodes.
Only 18% of companies surveyed were `satisfied’ with the level of capacity utilisation, suggesting that any upturn will lead to an immediate boost to manufacturing productivity.
Copyright: Centaur Communications Limited