Manufacturing firms are not expecting a quick improvement in the economic recovery following a “turbulent” year of steep declines in output and orders, with employment prospects remaining “bleak”, a major new survey showed today.
Research among 639 companies by the Engineering Employers Federation (EEF) revealed continuing concerns over cashflow constraints and uncertainty about the strength of markets as well as tighter credit conditions.
Firms' investment plans remained a cause for concern, said the report, which also revealed that firms were still cutting jobs, although at a slower pace.
EEF chief economist, Steve Radley, said: “Manufacturers are telling us that output is starting to stabilise but there is little sign of confidence coming back.
“Production is well below pre-recession levels and the road to recovery is likely to be long.
“The government has a key role to play in ensuring these problems don't prevent companies from making the investments needed to take advantage of the recovery when it comes,” he said.
Tom Lawton, head of manufacturing at BDO Stoy Hayward, which helped with the survey, added: “Although the pace of decline is easing, it's clear that the hoped for recovery is not imminent.
”The survey suggests that 2010 will be a difficult year, with subdued growth at best across the sector as a whole, and continuing huge challenges for key sub-sectors such as automotive,” Mr Lawton said.