As one company which took part in the recent CBI manufacturing survey, I guess we are partly responsible for the optimistic conclusion that was arrived at, says Peter Lewis, managing director of leading UK systems integrating firm IAC, based at Queensway Meadows, Newport.

The CBI Industrial Trends Survey reported that activity in the manufacturing sector remained steady in December, and production is expected to continue rising in the next three months.

However, I believe that the overall feeling of optimism could well be due to people assuming that things simply can’t get any worse.

Many firms have had to make continuing cuts to stay afloat, and some of these will be unable to cut any further. I don’t think that the feeling is one of hope rather than sense, but there could well be an element of desperation from one or two.

As for IAC, we have seen a small upturn in the past month or so, but I could not put my hand on my heart and say that we were over the worst.

Despite what is said in the City of London, and the rhetoric from the Chancellor of the Exchequer, we have not seen an end to the recession in Wales. We seem to be the only region in the UK which still has increasing unemployment, and we get lip service from Westminster where they think they can play politics with us simply because the Tories are not in government in Wales.

We have been concentrating our efforts on the overseas markets, and China in particular.

The Chinese market internally is not what it used to be. It has stagnated somewhat, but it is still a huge market. I believe that they will now be looking overseas to fuel the large businesses which have benefited from the economic growth they have enjoyed for the past ten years.

In order to maintain these companies, they will also be looking at exports and with the capital they are able to employ, we will all find it difficult to compete.

We have been trying to build relationships with Chinese companies so that we can work together on these projects. Engineering projects still seem to demand European control equipment, and our expertise, to complement the low cost manufacturing base in China. They are well set to continue the large manufacturing projects, but lack the experience and the expertise in the latest automation equipment.

Elsewhere in the World, we are seeing similar stories.

Our South African operation has also suffered in the past year due to the state of the economy in the region.

South Africa has been blighted by strikes and in settling these disputes, they have been giving wage increases of 10 per cent and more – all of which is passed on to the customer and fuels more and more inflation.

The exchange rate for the Rand has suffered as a consequence and imports have become more and more expensive. When we set the company up, five years ago, the Rand was at 13 to the Pound Sterling – it is now 18 to the Pound Sterling, and it is difficult to see how the current government is going to turn this around.

Despite all this, we have been able to keep our business busy and we have not lost anyone in South Africa.

Similarly in the UK, we have suffered over the past two years, making losses due to a lowering of turnover.

Through all of this, we have maintained our entire workforce and taken a hit on the balance sheet.

We have a policy of maintaining employment and we will continue with this as long as we can.

We are confident that things will get better, and if we are to take advantage of it, we must keep all of our highly skilled engineering staff.

A skills shortage will manifest itself very soon, and those companies who have failed to invest in apprentices or training will find it very difficult to recruit.

We have seen a growth in service and maintenance, indicating that more and more manufacturing firms are reducing there engineering support and turning to subcontract.

As I said earlier, unemployment is getting worse in Wales, not better.

We need to return to core skills, and engineering should be put at the front of this push. We have a tradition in steel and manufacturing which is supported by an excellent pool of talent in engineering.

I have watched as our universities in Wales have cut engineering tuition and closed courses for part time students.

In previous years, industry in Wales was supported by colleges of higher education putting on part time courses as demanded by the local industry.

These colleges have now migrated into universities and lost their way.

They are now producing graduates in knitting and jewellery making, when they were previously turning out incredible engineers who were part of a first-class apprentice set up and contributing to society rather than coming out of school with huge debts.

This is all as a result of the funding system which rewards full-time courses over part time.

It is time we looked for a joined up approach to education and came away from the competitive system we have now. Universities should be managed, not allowed to churn out graduates in courses which there are no jobs for or a demand. They need to work out who their customer is and stop the merry-go-round of self-gratification and expansion.

In the past month, we have finally managed to win a major order from China and seen an upturn in the UK market. Although this cannot be said to be an upturn, it is at the least, a start. Now we have to start the hard work of maintaining the acceleration.

Happy Christmas and here’s to a prosperous New year for us all 2015.