Engineering is technically in recession with falling output for two successive quarters, according to the latest Business Trends survey released by the Engineering Employers’ Federation (EEF) on Tuesday.
In the third quarter of 1998, every indicator was at its lowest level since the survey started in 1994.
Export orders fell steeply for the seventh successive quarter, domestic order intake weakened, capital spending plans were in decline and the fall in employment accelerated.
EEF director general Graham Mackenzie said the recession in the engineering sector is becoming deeply entrenched.
‘The high level of sterling and the slowing of the domestic economy [is] taking a painful toll,’ he said. Firms were trying to weather the difficult times by shedding jobs and curtailing investment, he added.
Last quarter, for the first time in the survey’s history, the employment balance turned negative, to 3%, meaning a small majority of respondents reported a fall in employment at their company.
In the third quarter, though, this balance fell more sharply to 21%. Falls in the number of people employed were reported in every UK region.
Between the latest two quarters, the deterioration was most marked in the engineering heartlands of the south of England and the Midlands.