According to the Quarterly Review of the industry published by Scottish Engineering, the support group for the industry the improvements recorded in the previous two quarters have continued, pushing the figures well into positive territory.

The improvement is evident in general orders (43%up,35%same,22%down), UK orders (38%up,39%Same,23%down) and exports (28%up,45%same,27%down) with only medium sized companies reporting negative figures in export orders (22%up,45%same,33%down).

Dr Peter Hughes, Chief Executive of Scottish Engineering said: "While order intake, output volume and employee numbers have all returned to positive territory for the first time in three years, it is noticeable that plans for capital investment remain negative. Despite assurances to the contrary there continues to be very little evidence of banks making money available for our manufacturing engineering sector."

UK prices in general (19%up,70%same,11%down) have made a welcome move into positive figures as have export prices (19%up,71%same,10%down). Margins, however remain negative in both UK markets (8%up,62%Same,30%down) and exports (11%up,64%Same,25%down).

The improvement in orders and output has meant that levels of optimism have increased substantially in general (35%up,47%Same,18%down) and this is also reflected in small (37%up,46%same,17%down), medium (32%up,46%same,22%down) and large companies (38%up,50%same,12%down).

Dr Hughes added: "I am pleased to see that the information given to me on recent visits to member companies around the country are being confirmed in our latest review data which has moved back into positive figures."