AN upturn could be around the corner for the North-west's beleagured manufacturing industry.

The latest regional survey by the Engineering Employers' Federation shows that the situation in the first quarter of 2002 was much the same as it was in the final quarter of 2001.

But there were indications that improved trading conditions would show through in the third and fourth quarters of the year.

Job losses remained a serious problem at the start of the year with 44 per cent of those quizzed reporting that they had reduced their workforce to some extent in the quarter.

Although order books for the UK market were still under significant pressure, there was a glimmer of optimism in the figures for export orders -- a turnaround of 20 per cent on balance.

Andrew Semple, External Affairs Manager for the EEF in the North-west, said: "There is no doubt that the survey backs up what we have been hearing from our members across the region.

"We are seeing a continuing restructuring of manufacturing that has shaken out a significant number of businesses not prepared or able to change in response to massive competitive pressures.

"Good news has been thin on the ground for some time but the consensus is that an up-turn may be around the corner -- manufacturers need to be making investments in research and development in new technology and production now to capitalise on those opportunities."

The EEF is happy that the Bank of England Policy Committee has decided to keep interest rates on hold.

But it is looking forward anxiously to Chancellor Gordon Brown's Budget on April 17.

Mr Semple said: "The budget this month is an opportunity for the Chancellor to confirm the delivery of the fiscal incentives for research and development that will give investment in those areas a genuine boost."