NORTH West manufacturers continue to be in a downbeat mood.

Confidence and expectations are suffering -- according to the latest regional survey of engineering and manufacturing by the Engineering Employers' Federation.

Firms say they are being hit on two sides -- by the knock-on effects of the down turn in the US and by the impact of the slow down in the communications technology sector.

The EEF says the manufacturing shake-out has led in a number of cases to North West production capacity being moved abroad.

And 28 per cent of the firms surveyed said there had been job cuts in the second quarter of the year.

But, on the brighter side, order books showed a slight improvement over the previous quarter.

Mr Andrew Semple, the EEF's External Affairs Manager in the North West, said cuts in UK interest rates this year had assisted business investment.

But he went on: "The MPC must recognise that manufacturers are at the sharp end of the effects of their decisions and maintain the downward trend, particularly with the Fed acting to bolster the US economy with their cut this week.

"Perhaps the most concerning element of the survey is the impact of deteriorating confidence in the communications technology sector and allied business and its knock on in the supply chain."

He added: "Raising competitiveness is the watch word and EEF members will be looking to the Chancellor for a fiscal helping hand in research, development and investment in IT particularly, when he comes to frame his pre-budget statement in the autumn."