Scottish Engineering, the support group for the engineering industry in Scotland reports order intake figures well down on the last quarter and output volumes at the lowest level for ten years. As can only be expected, optimism has also plummeted.

UK orders across all sectors and size of company (12%up,23%same,65%down) are as low as they have been since Scottish Engineering started its Review in 1991. Export orders (13%up,24%same,53%down) have also dropped considerably since the last quarter of 2008.

One light on the horizon is that companies are forecasting that the next three months will be slightly better for both orders and output, though not good enough to bring the sector back into a positive situation.

Recruitment within large companies (20%up,70%same,10%down) shows that more companies are taking on staff than are shedding them which is against the general trend (12%up,55%same,33%down) and also is not being reflected in small (136027 or medium companies (8%up,39%same,53%down).

Dr Peter Hughes Chief Executive of Scottish Engineering commented: "While the figures produced in this quarter's Review make depressing reading I am hearing reports from individual companies who are doing well. Our Back Page writer, Archie Bethel is seeing a healthy future for Babcock Marine both at Rosyth and Faslane.

This will also have a knock on effect for the large number of sub contractors that both of these major sites use.

"Our sector has been down before, most recently in 2001, and I believe that the manufacturing engineering sector is in good shape to take best advantage once this recession bottoms out and industry once again picks up. As I have said in the past, if governments had invested even half the amount in the manufacturing sector as they have in the banks then we would have a flourishing economy."