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So, is the end in sight? Of the recession, of course, not the economy as we know it. There’s evidence, not entirely convincing, from our regular quarterly survey of PE readers that the worst of the 2008-09 downturn may be behind us, and some confidence that workload and output will improve over the next three months.

The upward curves on the right-hand side of both graphs above show that things have been better, though not good, for readers in the past three months, and that they forecast more improvement in the three months to come.

But there are caveats. The left-hand graph shows that our survey respondents, 364 of them, consider their own workload in their own company or organisation has marginally risen in the past three months. That’s the top line, and it’s now in positive territory again, having dipped below the zero line for the first time ever in the second quarter this year.


	Activity in the last three months (left) and forecasts for the next three months (right)

But the other two lines on that left-hand graph, showing workload for the respondents’ sectors and for engineering as a whole, have been still very much in negative mode in the past three months: not as bad as they were, but still historically among the worst results we’ve had.

If that gives a fairly mixed view of the past three months, then the right-hand graph showing readers’ views of the next three months’ workload for themselves, their sectors and industry as a whole appears much more clear-cut. All three lines are positive for the first time since the third quarter of 2007. Even in the second quarter of this year, readers still felt worse was to come. That isn’t the case now.

But again, a small warning is needed. Many companies and organisations in engineering are starting the last four months of 2009 from low levels of activity. If they’re seeing improvement, it’s off the back of these conditions and it’s another indication that, though things may be better, they’re not necessarily good.

The direction is encouraging, but there may still be a long way to go. Several readers said they feared any respite might be temporary: there are concerns that the cash being pumped in to revive the economy will need to be recouped from the second half of 2010, leading to a “double-dip” recession.

First, the usual explanation of what we do with these quarterly surveys and how we do it. Every three months, our survey aims to get a picture of what individual engineers’ workload has been for the previous three months, and what they expect for the next three. We get them to gauge activity for themselves, the sectors in which their employers operate, and for industry as a whole. Negative answers are subtracted from positive to get a balance score for each question ranging between +100 and -100: those are the numbers transcribed to the graphs.

We can see from the left-hand graph that, looking back over three months, readers believe they’ve been busier than they were in the period before that: there’s a positive balance of +9 – the highest for a year and one which follows the first ever negative score on this top-line in the survey in June.

However, readers’ views on their own activity are not matched by what they see elsewhere. There’s a negative balance of -20 in workload perceived in their sectors, so engineers think their firms are busier than their rivals. A -46 balance believe activity across engineering as a whole has declined. The positive you can derive from these two negatives is that they are markedly less bad than they were three months ago.

In the right-hand graph, where engineers say what they think will be the workload in the next three months, it’s now all positive for the first time in two years. In all, 39% think their own levels of activity will go up in the next three months, and 14% see further decline. That +25 balance may be the best for more than a year but it is still the fifth lowest since we started these surveys in September 2002.

Strangely the better news is in the lower two lines of the right-hand graph, where there are positive balances of +13 and +7 for workload in readers’ sectors and across engineering as a whole. These aren’t historically high, but they are much improved on recent results.

We verify our results with direct questions: did our readers consider the past 12 months to have been a successful period for engineering? The answer is a thumping No, with a negative balance of -54, down on the -32 of June and a new low for this particular figure.

We also ask whether they consider that the coming 12 months will be a successful period for engineering and the negative -5 balance we get here is why we’re cautious about predicting recovery. Patently, -5 is better than -25 in June, -58 in March and -55 last December, but it’s still not good.

Finally, we ask readers which of a range of factors they consider as the biggest threat to the prosperity of engineering in the coming year. As in June, it is the government, rising from 33% to 35%. But perhaps the more telling advance is that 23% now see competition from overseas as the single biggest threat. That’s traditionally been a big worry for UK firms, but it receded during the recession. Now it seems to be coming back, reflecting, perhaps, lack of confidence that recovery from recession will benefit UK engineers. Which is another reason to be cautious about whether the end of the downturn is in sight.

JP

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