Strong pound `threatens engineering jobs'

Conditions in the UK engineering sector have `deteriorated significantly' because of the strength of the pound, according to the Engineering Employers' Federation. Overall output fell in the second quarter of 2000 - the first drop for a year. The problem has spread beyond exporters as well, with order books falling at home as well as abroad, it says.

Sterling's value hit a 15-year high in May, and has since dropped back sharply. The EEF comments that this fall `has probably come just in time to stop the industry falling back into recession.'

However, the good news may have come too late to prevent engineering job losses. In a survey, 17 per cent of EEF member companies said they were planning to reduce staffing levels in the coming year. `While we are hoping that the decline in sterling has at last brought some relief to exporters, manufacturing remains in a very fragile position,' comments EEF chief economist Stephen Radley. `Future investment both by British companies and by inward investors depends on the pound stabilising at a lower level.'

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