For the second consecutive quarter, the manufacturing engineering sector has recorded considerable improvements in both order intake and output, according to Scottish Engineering's Quarterly Review of the industry.

The fourth trends survey of the year is the most encouraging of 2009 with most of the measurable areas maintaining a negative result, but fast approaching the point where they will become positive.

Within the various subsectors order intake figures are the best for 18 months and output volumes are better than they were in the whole of the last 12 month period.

Commenting on the figures, Dr Peter Hughes, Chief Executive of Scottish Engineering said: "While we are very encouraged by the figures reported in this latest Review we are still aware that many of our smallest companies are suffering. Machine shops, metal manufacturers and fabricators are finding most difficulty in pulling themselves out of the recession."

Across the whole of the industry staffing levels remain difficult (17%up,57%samer,26%down) but the trend continues to show improvement on the previous two quarters. Overtime, on the other hand (25%up,33%same,42%down) remains at a low level, though with increasing orders there may be a change on the way.

Mr Hughes added: "Companies are still finding it difficult to increase prices within the UK but in general, export prices have moved into positive with 9 percent of companies able to raise prices as opposed to 7 percent who have seen prices drop. One of the most important figures here is the fact that the remaining 84 percent have seen their prices remain static."

It is indicative of the improvement in orders (32%up,33%Same,35%down) and output volumes (30%up,34%same,36%down) that overall there has been a substantial improvement in the levels of optimism (34%up,41%Same,25%down) witnessed across the whole of the industry.

Within the various sectors, one of the most encouraging is in electronics which has returned from a massive negative in orders in the last quarter to a stable position in this latest review as the percentage of companies reporting increases in orders equals the number of companies who have seen their orders diminish (33%up,34%same,33%down).

As the level of optimism has improved, more companies are forecasting that the next three months will bring better order levels (26%up,50%Same,24%down), increases in output volumes (29%up,41%same,30%down) and further improvements in staffing levels (14%up,66%same,20%down).

For further information contact Colin McGill on 0141 221 3181 or 07976 224412 or visit the Scottish Engineering website on www.scottishengineering.org.uk