However, as order intake within the engineering sector as a whole remains negative, large companies are bucking that trend and have returned positive results.

Dr Peter Hughes, Chief Executive of Scottish Engineering said: "While we are disappointed that our sector has failed to break through into the positive area on all fronts, the signs are at least indicating that we are heading in the right direction."

One of the sectors showing the greatest improvement in the review is electronics where the order intake figures (45%up,32%Same,23%down) showed a substantial positive return. Unfortunately machine shops (9%up,55%same,36%down) and metal manufacturing (23%up,39%same,38%down) appear to be taking longer to pull themselves out of the recession.

Across all size of company and sectors the general levels of optimism have risen (35%up,42%same,23%down) which is reflective of forecast of the next three months in both UK orders (37%up,46%Same,17%down) and exports (26%up,56%same,18%down).

Dr Hughes added: "Plans for training investment have moved into positive territory for the first time in seven quarters indicating that engineering companies are recognising once again that to maintain their momentum they must have staff of the highest calibre."

Despite the overall improvement in trading conditions, staffing levels in general (16%up,60%Same,24%down) show that more companies are shedding staff than are hiring. This is coupled with a general overtime requirement (24%up,38%Same,38%down) which is also negative.

Looking to the future, Dr Hughes said: "I am hopeful that the manufacturing engineering sector will break through into a positive trading situation in the near future and it would be a welcome bonus if either Holyrood or the Westminster government would bring forward some major infrastructure projects like the new Forth bridge or the Beauly to Denny power line."

For further information contact Colin McGill on 0141 221 3181 or 07976 224412.