Engineering sector still in the doldrums

The serious recession in the engineering construction sector is showing no signs of improvement, according to the latest quarterly survey of the Engineering Construction Industry Association.

The survey - sent out to around 300 member companies - revealed a low level of use of available capacity, a lack of orders and a continuing trend for job losses.

In comparison to other engineering sectors such as manufacturing the figures make grim reading, with only structural steelwork and scaffolding showing the beginnings of a recovery. In these two sectors the numbers of enquiries are increasing but pressure on prices remains severe.

Of those replying, 71% said they were working below a satisfactory full rate of operation and although this compares to 77% last quarter, the ECIA suspects this may be more to do with the loss of some struggling companies rather than an upward trend.

The balance of companies showing an increase in orders has increased slightly by two points to 16 but this compares with a figure of 36 for manufacturing. The engineering construction figure is particularly affected by a fall in the number of firms reporting an increase in export orders.

On capital expenditure, the survey showed that only a small number of firms were looking to invest. The ECIA survey said: 'The investment intentions revealed in line 6 of table 1 suggest engineering construction confidence is static and at a very low ebb.'

The ECIA concludes: 'Engineering construction tends to lag behind much of the rest of the UK economy. Having entered recession later than other sectors, engineering construction probably still has some way to go before it experiences a recovery.'