Veteran Midlands industrialist Brian Cooke regards the ups and downs of the economic cycle with the stoicism of Rudyard Kipling, who wrote: "If you can meet with Triumph and Disaster and treat those two impostors just the same . . ."

The boss of Castings, whose products include lorry parts, is busy installing a new foundry that may come on stream just as demand turns down.

So far, businesses in the UK's manufacturing heartlands have been enviably insulated from the turmoil that has hit banks and builders. Engineers expect to run out of road eventually, but even then the downturn should be less severe than for some other parts of the economy.

"There is never a right time to do anything," chuckles Mr Cooke. He recalls that the Black Country business, valued at £130m by a market that rates it more highly than larger rivals, built new foundries during tough times in the 1960s and 1980s.

"Neither opened for a year, and perhaps history is about to repeat itself," he says, "But eventually things will pick up and the capacity will be needed."

David Grove, chairman of Hill & Smith, a highways infrastructure specialist capitalised at £266m, says: "Demand is high across our market. We have issues with rises in steel and energy prices, but we are being reasonably successful in passing those on." Indeed, rising transport costs help H&S, which is based in Solihull, because its metal crash barriers are lighter than concrete alternatives.

Mr Grove is sceptical of official figures suggesting that Midlands manufacturers create far less value than rivals in other regions. "Companies that are headquartered here such as IMI, Umeco, Hampson and Hill & Smith are all doing fine at the moment," he says.

"The bulk of stocks are trading well," says David Larkam, an engineering analyst at Birmingham-based broker Arden Partners. "The immediate outlook is good, although what lies two to three months ahead is more uncertain."

For example, analysts fret over the outlook for the drinks dispenser division of IMI, a group capitalised at £1.6bn.

A Citi research note, while rating IMI a high-risk buy, pointed to the risk of the US consumer downturn hitting investment in IMI drinks dispensers, which are widely used in fast food outlets. IMI's view is that high margins on drinks give it some insulation from cost- cutting.

IMI's stock market rating is also supported by the group's exposure to the energy sector and persistent rumours that it will be taken over. Shares in GKN, the Redditch-based multinational valued at £1.77bn, have been weaker lately, reflecting its dependence on the shaky world car market through its constant velocity joints business.

Confidence remains high among manufacturers, according to a survey from the EEF, with orders generally strong in spite of US softening. West Midlands manufacturers were mid-table in terms of their level of optimism concerning the next three months. East Midlands businesses were substantially more pessimistic.

Proving that it can occasionally be grim down south as well as up north, manufacturers in London and the south-east gave the gloomiest assessment of short-term output, orders and employment. This was consistent with the beating that the market has meted out to London-based Tomkins. The group, capitalised at £1.5bn is uncomfortably exposed to the motor and construction industries.

In common with many British engineers, Tomkins has diversified geographically to the point where only 18 out of 142 factories and 4,600 out of 33,700 employees case are based in Europe. Yet Jim Nicol, chief executive, still sees the UK as an important centre of expertise, not just for the top layer of engineering professionals but also as a source of skilled workers.

"The professionalism of the engineering [in the UK] is extremely strong and world class," he says. "The UK still has a well-educated shop floor."

The dominance of Britain as a centre for research and development alongside production for many of the teams in Formula One racing demonstrates the UK's status as a centre of high-end engineering, he says. Mr Nicol says that wage inflation in developing markets such as China, combined with relatively poor infrastructure and remoteness from some end markets, places constraints on offshoring. The UK, Europe and North America still offer advantages for engineering groups.

Another constant identified by Mr Cooke, as engineers prepare to absorb their share of the fall-out from the credit crunch, is that "there will always be a crisis every few years because of the whizz kids in the City".