JOB cuts in the beleagured manufacturing industry accelerated in recent months as the sector came close to recession, a new survey has revealed.

The recent decline in the value of the pound arrived just in time to prevent manufacturing industry falling back into recession, according to the Engineering Employers Federation (EEF).

Its latest survey of 6,000 firms showed that after three successive quarters of improvement, conditions deteriorated "significantly" in the three months to June.

The crisis in the motor industry coupled with the high value of the pound combined to speed up cutbacks in jobs and investment, said the federation.

Orders in the UK and abroad fell "considerably" for the first time in a year while the number of jobs lost in the past 12 months reached 25,000.

Chief economist for EEF, Stephen Radley, said: "While we are hoping that the decline in sterling has at last brought some relief to exporters, manufacturing remains in a very fragile position.

"Future investment both by British companies and by inward investors depends on the pound stabilising at a lower level."

John Nutton, chairman of the engineering group RSM Robson Rhodes, said: "Although engineering companies can take small comfort from the softening in the strength of sterling, its decline is marginal and its absolute strength continues to make export markets difficult.

"The medium to long term prospects of those companies supplying the automotive sector look especially difficult."

Output was reduced most sharply in south east England, Wales and Greater London in the three months to June, although the EEF said other regions had been hit particularly hard by problems in industries such as automotive and steel, including the West Midlands, Yorkshire and Humberside, and Wales.

The Federation added that the picture was reinforced by historically low levels of pay awards of around 2.4 per cent.