High energy costs and the looming pensions crisis are dark clouds on the horizon for Midlands manufacturing, the new president of the regional branch of the Engineering Employers Federation (EEF) has warned.

Speaking at the manufacturing association's AGM, Sue Fowler said 2005 had been a challenging year for businesses across the region.

She was more optimistic about 2006 though, and hoped this year would mark some sort of recovery for the region's economy.

Ms Fowler, who is HR development director at GKN Sinter Metals at Redditch, said: "It has been a tough year for manufacturing in the West Midlands with increased costs from energy and pensions, as well as the collapse of MG Rover, impacting on the region's economy.

"The results over the year of the EEF West Midlands' Business Trends Surveys showed that domestic orders were still declining.

"The motor vehicles sector continued to have a negative impact on the region's economy, and margins remained under severe pressure because of escalating costs, and global competition.

"On a brighter note 2005 was a record year for inward investment, while export orders have been holding up and even growing towards the end of the year.

"Hopefully this proves there is light at the end of the tunnel as we see some improvement for the manufacturing sector in the early part of 2006."

Ms Fowler added that with the problems manufacturing was facing she was disappointed there was a lack of discussion or solutions coming from politicians during the General Election last year.

"It's a pity that it took the collapse of MG Rover in the middle of the election campaign to initiate any discussion amongst political parties of the problems felt by the manufacturing or automotive sector.

"We will continue to put pressure on our political representatives to make the industry a higher priority than it has been of late."

Speaking at the event, which was held at EEF's HQ in Edgbaston, Ms Fowler added: "EEF West Midlands continues to play an important role in helping businesses in the region.

"From explaining new legislation to making sure engineering and manufacturing is strongly promoted to Government, higher education, schools and the public generally." ..SUPL: