Rising demand from buyers abroad has improved conditions for UK manufacturing businesses, a new report from the Engineering Employers Federation (EEF) suggests.

The research predicts that manufacturing output will rise by 3.7% this year and by 3.2% in 2011.

As a result of this upturn, the report notes that jobs are being created, although they are often filled by temporary or agency workers rather than full-time staff.

However, the report warned that the planned cuts in government spending, coupled with the potentially unstable situation in the US, could have a detrimental impact on the sector in the future.