With the passage of time conditions in the UK's precision engineering sector continued to improve in the fourth quarter, a major survey released by engineering employers' federation and BDO LLP showed Monday. However, manufactures said signs for a strong rebound in 2010 remain obscure.The EEF (Engineering Employers Federation) forecast manufacturing output to rise only 0.9% next year after plunging 10.4% in 2009. Fewer precision engineering firms reported declining output in third quarter, following the historic lows seen in the second quarter. The fourth quarter survey confirmed that the worst of the downturn is behind the sector. The output balance in precision engineering company rose to minus 3% from minus 25% in the third quarter and the balance on export orders improved from minus 44% to minus 5% in the past six months.
Chief Economist of EEF, the manufacturers' organization, Lee Hopley said.
"Manufacturers have been grappling with extremely difficult trading conditions for more than a year now, but we are not out of the woods yet and a great deal of economic uncertainty remains,"
Further, the survey found that confidence across manufacturing remained fragile, as precision engineering companies expect other obstacles on the road out of recession, such as increased exchange rate volatility and potential supply chain risks. Also, investment balances remained below their long term average in the first three quarters of 2009 as companies rapidly scaled back plans for capital expenditure over the precision engineering services in coming 12 months.
Head of Manufacturing at BDO LLP, Tom Lawton said,
"The good news is that while we expect to see a flat performance across the first two quarters of 2010, we do expect to see a real improvement by the fourth quarter."
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