The worst may be over for hard-pressed manufacturers, according to a survey.

EEF, the manufacturers’ association with members across the county, found that while firms continued to face tough trading condition for the past three months, they expect the picture to improve later in the year.

While it expects manufacturing output to fall by 11 per cent this year, with engineering output down 17.5 per cent, EEF members anticipate a modest recovery in 2010.

The effects of the recession appear to be stabilising in some sectors as destocking nears an end. However the timing of a return to growth remains uncertain, and the impact of the sale of GM Europe on carmaker Vauxhall could affect the situation.

Lee Hopley, EEF Head of Economic Policy, said: "The weakness in world markets has hit the sector hard, but it looks like manufacturers are now close to the bottom of the cycle.

"Nevertheless companies will be navigating through the current economic storm in the months to come. And there are big question marks about when we will see any substantive signs of a recovery in demand.

"While there may be some bright spots on the horizon, the government can not afford to think its work is done and lose focus on the economy. While companies are preparing for the upturn, government and the Bank of England need to ensure they can access the support they need from banks and credit insurers."

Forecasts show a return to growth in 2010. Continued weakness in global trade and exchange rate volatility continued to blunt the potential boost from a weaker pound with the balance on export orders remaining relatively unchanged.

The regional picture was mixed with those that reported the weakest output and orders balances in 2009 Q1 reporting an improvement in activity, albeit from low levels. A recent survey by EEF south east suggested that manufacturing was likely to be among the first sectors to show signs of coming out of recession.

Speaking to regional businesses, Steve Radley, EEF chief economist, said the rapid productivity gains made by manufacturers over recent years, coupled with the concentration of knowledge-based industries, could see the South East among the early movers in economic recovery.

"Although current economic indicators remain pretty dire, there are modest signs that the pace of contraction in manufacturing is slowing," said Mr Radley.