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No relief yet on the manufacturing horizon.

Byline: David Jones

THE battered manufacturing sector in Wales is bracing itself for continued tough trading conditions during the first half of 2003 at least - after shedding almost 10, 000 jobs over the last two years. The Engineering Employers' Federation is warning that continued poor growth in key export markets and uncertainty over the international political environment will leave manufacturers facing hard times.

EEF North West chief executive John Malam said: ``2002 was a tough year for manufacturers - our regular survey of EEF members across the North West and North Wales shows margins have remained consistently paper thin on both domestic and export business. ``That has restricted investment in marginal projects and has no doubt focused minds on the steps necessary to remain competitive. Our research suggests that sector growth is not likely before the second half of 2003. ``We have seen a major restructuring of the sector in recent years and one that will continue at speed. There have been a number of big job losses as companies re-organise. We have seen redundancies of around 5pc in the number of employees in our member companies. Many are shifting production abroad to more cost effective locations - that is the nature of global competition. ''

The warning from the EEF comes hard on the heels of a survey carried out for the GMB which revealed that 4, 578 manufacturing jobs were lost in Wales last year on top of the 5, 000 that were shed in 2 001. Total national manufacturing job losses of 71, 000 in 2 002included 2 , 970 on Merseyside and 4, 366 in the North West. By contrast, London lost just 54 manufacturing jobs during the year, said the union.

Recent reverses have included the closure of Owens Corning's fibre glass plant at Wrexham with the loss of 230 jobs. The American parent company blamed huge financial losses, estimated at pounds 44m over five years, and an inability to match the prices of competitors in Eastern Europe and the Far East where wage costs are much lower. GMB general secretary John Edmonds said: ``British manufacturing continues to be in crisis because we remain uncertain in adopting the euro. ``This has become a major factor in deterring multi-nationals from investing in Britain. While the euro and the pound remain worlds apart we will continue to see these job losses despite best efforts. ``The only way to protect British jobs is to join the euro as soon as possible and at a realistic exchange rate. If we don't we will continue to see the manufacturing industry plummet. '' Looking at the wider picture, Mr Malam said: ``The economic prospects of key markets in the euro-zone and the US will significantly drive performance in 2 003 - and they do not look very good at present. In addition it is not clear how the situation in Iraq will be resolved and how that will impact. Of course the announcement on the five economic tests and the debate on joining the euro will all be watched carefully by manufacturing bosses.

``The coming year will again be all about change in the region's manufacturing - good businesses know that and what they need to raise their game in terms of value added production. What they want is support for the skills they need in business and for a firm lid to be kept on the cost of doing that business in the region''. The EEF in the North West and North Wales has more than 700 member companies employing about 80, 000 staff.
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Title Annotation:Business
Publication:Daily Post (Liverpool, England)
Geographic Code:4EUUW
Date:Jan 8, 2003
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