In their latest Quarterly Review which is a trends survey of the industry, output volumes are sustained, staffing levels continue to be buoyant and though order intake has slipped slightly it still remains extremely positive.

Throughout the Review there are encouraging figures in all sizes of company and across all sectors except fabricators which appear to be suffering on the back of seasonal demand.

Dr Peter Hughes, Chief Executive of Scottish Engineering said: "In a number of meetings I have held throughout Scotland recently there is a significant level of optimism, with relatively few companies having a negative outlook for 2011 and beyond. Following the record high results we reported in our September Review it is heartening to see that the overall message from the manufacturing engineering sector remains extremely positive."

Throughout the engineering sector, the order intake figures (43%up,29%same,28%down) are at a level last achieved three years ago. Output volumes overall (48%up,29%same,23%down) are still being maintained by the record levels of orders gained in the previous quarter.

Prices in the UK across the sector (13%up,74%Same,13%down) showed as many companies increasing prices as were decreasing them...with the vast majority leaving their prices as they had been in the previous quarter. However, forecasts for prices in the next three months (22%up,71%same,7%down) are more healthy.

Staffing levels (29%up,60%same,11%down)are being maintained across the whole of the industry which is reflected in small (20%up,64%same,16%down) medium (49%up,49%same,2%down) and large companies (20%up,70%same,10%down).

Dr Hughes added: "Though the engineering sector is holding up well, I am aware that other areas like construction and retail seem to be coping less well. Judging by the recent Scottish Budget, our politicians seem to be more concerned about re-election than they are about tackling the real problem with our Scottish economy."