Electronics and aerospace buck trend

Electronics and aerospace buck trend
Melanie Reynolds Electronics and aerospace industries will increase output in 1999 while other sectors of the engineering industry suffer a downturn. So claims the latest engineering trends survey conducted by the Engineering Employers Federation (EEF) and forecasting consultancy Business Strategies. It forecasts a slowdown in growth in the volume of engineering industry output, from 3.5 per cent in 1997 to 0.5 per cent this year with very little recovery in 1999. This, coupled with an expected increase in imports, makes the likelihood of job losses high as companies seek to reduce their costs and increase productivity. Employment in engineering is currently around 1.7 million, but it is expected there will be a six per cent reduction in 1999, with more to follow. Electronics employment is expected to stay stable or maybe even grow. “Electronics is advancing through technological change and reaping the benefit of past foreign investment,” explained Graham Mackenzie, EEF director general. “Electronics is a key sector. It is very buoyant.” The survey blames the strength of the pound as the predominate factor in engineering’s future woes. The Confederation of British Industry (CBI) report on UK manufacturers tells a similar story. “The strong pound is hurting exporters badly and this has now hit manufacturers’ investment plans,” said Ross Buckland, CBI economic affairs committee member. The CBI survey shows export prospects for the year ahead are the lowest for 18 years. Just 11 per cent of firms reported optimism about the general business situation but 33 per cent were less than optimistic.


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