Engineering employment is likely to fall over the next three years, according to Oxford Economic Forecasting (OEF).
The engineering and metal goods sector is expected to see the most dramatic fall, from 975,000 employees in 1997 to 763,000 in 2002. This reflects worries over employment law and lack of orders.
But the OEF forecasts a slight rise in output to 2002, which will come largely through improvements in productivity.
The electrical engineering sector outlook is more balanced, with a rise in employment likely in the consumer goods and computing firms. But traditional products, such as fittings, are likely to be hit by the fall in manufacturing investment.
A big fall in employment in the transport equipment sector is forecast. Prospects depend greatly on improvements in productivity, but better productivity could also result in fewer jobs.
Total engineering turnover was up 1.4% in January compared with December 1998, and up 5.0% after a year of rises and falls. Orders recovered slightly, but were still lower than at any point in 1997.
Machinery and equipment sector turnover recovered slightly in January, but was 5.1% lower than a year ago.