The divergence in the share price performance of FTSE 350 engineering companies last year was due in part to the state of end markets. The continued recovery in the aerospace sector, where demand for new planes is strong despite Boeing’s (US:BA) recent travails, means that companies with the greatest exposure, such as Melrose (MRO), have outperformed – its share price rose by over 80 per cent last year. The automotive sector, too, rebounded after the global shortage in semiconductors eased, allowing carmakers to ramp up production to meet demand backlogs.
It's been more of a struggle for the broader manufacturing sector, though, with the FTSE 350 Industrial Engineering Index down 9 per cent over the past 12 months. Companies have been faced with customer destocking as supply chains normalised and end-user demand waned.
