by business editor Trevor Sturgess

Eurozone uncertainty has dampened manufacturing demand across Kent and the south east but orders from emerging markets are holding up, according to a survey.

Economic turbulence in mainland Europe has taken a toll on confidence, with flat output and orders for the next three months.

However, the survey by the Engineering Employers Federation (EEF) and BDO, the business advice group, found that south east manufacturers are taking advantage of growth in emerging markets.

There is also good news on the jobs front, with a positive trend in recruitment that began in 2010 continuing into 2012.

The manufacturing sector expects to show a slight fall this year, although the EEF forecasts a recovery in the second half of the year, gaining momentum in 2013.

Barring any further economic and political shocks, the EEF expects to see manufacturing growth of 2.2% in 2013, outperforming anticipated overall GDP growth of 1.8%.

The survey found that economic uncertainty appears to be hitting smaller companies hardest, causing cash flow problems amongst those with the shallowest pockets.

Kevin Cook, BDO partner, called for measures to help protect and support these companies, warning that otherwise “we face the prospect of losing the type of innovative engineers for which the UK has become globally renowned.”

Jim Davison, EEF regional director, said manufacturers were displaying resilience and agility.

“However, the main risk to activity is still rooted in the on-going Eurozone crisis. While the growing political and economic uncertainty in the region has not significantly dented confidence as yet, it is far from clear what or when the end game might be.

"This could delay positive investment intentions being translated into a sustained recovery in capital expenditure, at least in the short term.”