New research suggests that the demand for engineering contractors is likely to continue to be strong, as the engineering sector has proved to be very competitive in gaining overseas orders - and the weaker pound has also boosted demand in Europe.

According to contractor service provider, giant group, a recent poll of engineering contractors reveals that 63% believe their contract rates will rise over the next year, despite the effects of the predicted economic downturn on other sectors of the economy.

Government statistics show that the value of new engineering orders has increased by 4.1% in the three months to April 2008, compared to the same period last year. The value of export orders was up 17.7% over the same period. These increases are likely to feed through into strong demand for engineering contractors throughout 2008.

Matthew Brown, MD of giant group, said: "Fears that the economic slowdown would sap demand in the engineering sector have only partly materialised. While there has been a modest slackening of demand domestically, the UK engineering sector is proving extremely competitive at winning orders overseas."

"The emerging economies in Asia and the Middle East are developing rapidly and this is feeding through to strong demand in the UK engineering sector. The depreciation of the pound relative to the Euro is also boosting demand in the Eurozone."

"Engineering contractors are confident of pay increases over the next 12 months. The UK is still suffering from a long-term underproduction of engineering skills, so employers will need to compete fiercely for the skills they need, which could push pay levels up."