Metalbashers who don't outsource all their production to China and other low cost economies will survive and thrive, an industry leader has claimed.
More firms are turning their back and 'repatriating' their operations in the UK because of concerns over quality, said Mick Hall, chairman of the Metalforming Machinery Makers Association (MMMA).
He said those firms who shun the easy advantage of lower wages and carve out profitable niches will prosper.
But Mr Hall said there remained a confusing picture about the state of manufacturing in the UK, with positive stories being cancelled out by negative developments.
He said: "The more I read the more difficult it is to get a thoroughly clear understanding of the state of manufacturing in the UK and what the future holds..
"One day I read encouraging stories, the next day it is negative.
"There was a story about a UK company 'repatriating' it's manufacturing from China to a brand new production facility in the UK.
"They have been using China to manufacture their products since 2001. Now they find that increased shipping costs have counterbalanced the low wage advantage.
"The company is also saying it will be more convenient from a management point of view and yes, new jobs will be created."
Mr Hall said the performance of UK engineering fared better than manufacturing as a whole, and forecast growth albeit at a very modest rate.
He said: "It was also interesting to read that the one of the reasons for such a dismal performance during 2004 could also have been the UK's continuing off-shoring of product and component supply.
"A few months back, I heard of an engineer in a company, who allegedly said 'We manufacture some of our products in China, but they are not as good as the ones we don't. If they are not so good, why make them in China? I am thinking that the company that repatriated its production maybe has got it right in more ways than one.
"I know of a number of companies, who have no inclination to take their production to China or any other low wage economy to be precise.
"When I look closely at these companies, I believe I am right in saying that they are the ones that will survive and go on to prosper in our economy.
"Their complete attitude to business spells it out loud and clear and you know, they are very highly competitive."
Mr Hall thought the Nanjing deal with MG Rover would result not in a Chinese takeaway as many have feared, but some form of car manufacturing taking place somewhere in the West Midlands.
He added: "We believe there is a very profitable niche market here and we have some excellent skilled youngsters coming along."
The quality of entries to its sheet metal skill competition was increasing every year.
"One piece submitted in the Test Piece Class was so good, that one of the judges stated that he could not find any fault with it, the dimensions were 100 per cent accurate."