Despite the global economic disruption and the slowdown of growth throughout Europe, the manufacturing engineering sector in Scotland continues to show remarkable resilience, according to the latest edition of the Quarterly Review of the industry published by Scottish Engineering and M&C Energy

For the sixth consecutive quarter, figures for orders, output volume and prices are very positive while optimism within the sector remains high. This is reflected in the fact that staffing levels have been exceptional for the last five quarters.

The total order intake, incorporating UK and exports (47%up,28%same,25%down) have, for the last six quarters, maintained levels not seen since the second quarter of 2007.

Dr Peter Hughes, Chief Executive of Scottish Engineering, the support group for the industry in Scotland is in no way complacent. He said: "While our level of optimism remains high, our sector realises that in the longer term we are not immune to the effects of the uncertainty associated not only with the Eurozone but also the USA."

It is unfortunate that within the engineering manufacturing industry, while the overall figures read well, there are disciplines which are not performing so successfully far various reasons. This quarter metal manufacturing and non-metal products have seen their figures slip into negative territory. With order intake, for example, the figures for metal manufacturing (27%up, 37%same,36%down) are negative, but not quite so much as non-metal products (17%up,41%same, 42%down).

In both of these sectors, optimism is also negative; metal manufacturing (18%up,55%same,27%down) and non-metal products (8%up,61%same,31%down) .

Dr Hughes added: "It is also heartening to see that the majority of companies who completed our questionnaire are looking positively at the next three months. I see from the three main exemplars, orders, output and prices that they are all virtually as positive as the previous quarter has been."

With sales margins continuing to remain negative for both UK sales and exports, companies have been able to increase prices to cover constantly growing raw material and energy costs. Overall UK prices, incorporating all sizes of company and all sectors (22%up,70%same,8%down) and exports (20%up,74%same,6%down) show that while large numbers of companies are having to maintain prices, there is still an overall increase.

Commenting on the survey, Mark Dickinson, CEO of M&C Energy Group said: "We recognise that in the current survey engineering manufacturing companies have been able, to a certain extent, to increase prices, thus offsetting raw material and energy costs. As part of the process we would also recommend companies to be aware that savings as well as price increases can play a significant part in balancing the equation. All in all, we are delighted with the performance of the industry in Scotland."