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Manufacturing in Kent and the south east has returned to growth for the first time in more than a year, according to a survey. But bosses are concerned that the recovery is fragile.
The survey by EEF, the manufacturers' organisation, and BDO consulting group found that over the last three months, there has been a 37 per cent increase in manufacturers reporting improved output.
However, manufacturers are worried the road to full recovery will be slow.
David Seall, EEF South East region director said: "Any sign of improved performance for our manufacturers is to be welcomed, but there is little sign of a strong rebound as yet for 2010.
"The fourth quarter survey confirms that the worst of the downturn is behind the sector, and that the weak pound and recovering world markets are beginning to have a positive impact.
"Yet, confidence across manufacturing remains fragile, with companies concerned about obstacles on the road out of recession - such as increased exchange rate volatility and potential supply chain risks."
Companies expect to see an improvement in conditions throughout 2010 but growth is likely to be anaemic, according to EEF.
It is forecasting manufacturing output to have contracted by 10.4 per cent in 2009 but to grow by only 0.9 per cent in 2010. Engineering output is forecast to decline by 16 per cent this year and zero growth next year.