IntroMEASURES to boost investment by business must be at the heart of this week’s Budget, Yorkshire employers said today.

Manufacturing group the EEF said the sector was predicted to contract by 11% this year, but added: “Our forecasts also indicate that the worst is now behind us.

“For the past six months, manufacturers have been grappling with a collapse in global demand, but attention is now turning to preparing for the upturn.

“This week’s Budget should focus on helping manufacturers prepare for the upturn by supporting investment in modern machinery and innovation.”

The EEF called for a temporary increase in the Annual Investment Allowance from £50,000 to £250,000 and a temporary extension of the payable research and development tax credit to large companies engaged in low-carbon innovation projects.

For the longer term, Chancellor Alistair Darling must also send a strong signal to industry about how government policy intends to deliver a broader base for growth across the UK economy, the EEF said.

Steve Radley, EEF chief economist, said: “Manufacturers are preparing for the upturn and are looking for the Budget to provide forward-looking and positive measures to help them cement their competitive position for the future.

“By helping companies invest now for the future the government would show that it is committed to supporting a stronger and more stable economy in the long run.”

Among other potential Budget measures, the EEF wants to see the restoration of relief on business rates on empty property; measures to underwrite trade credit insurance and postponement of any increases in indirect taxes such as the climate change levy and landfill tax.

The EEF said it would publish its own proposals on revitalising the UK economy in a report on the future of manufacturing to be published in June.

The EEF represents almost 6,000 member companies employing more than 900,000 people in the engineering, manufacturing, engineering construction and technology-based industries.