For the first time in 12 years all of the indicators within the Scottish Engineering Quarterly Review are positive with the exception of price margins for both UK sales and exports.

Order intake and output volumes have both increased considerably over the previous quarter and compared with a year ago which has resulted in a healthy rise in employment numbers and overtime being worked.

Dr Peter Hughes, Chief Executive of Scottish Engineering, the support body for the industry in Scotland has been encouraged by the increase in staffing numbers and the fact that more companies are now pushing forward with capital investments.

He commented: "Despite a background of problems arising from the banking crisis the amount of capital investment is at its highest level for more than two years. We are seeing companies from all disciplines within the engineering industry taking positive steps to maintain the growth that started from a very low base virtually a year ago and has continued with growing momentum up to the present quarter."

The overall total order intake has improved in small (43%up,38%same,19%down), medium (43%up,48%same,9%down) and large companies (62%up,38%same,0%down) and it is interesting to note that the figures increase in-line with the sizes of company.

Forecasts for both UK and export orders for the next three months remain positive.

Within order intake of the various sectors, electronics (38%up,43%Same,19%down), mechanical equipment (45%up,33%Same,22%down), fabricators (33%up,50%same,17%down) and non-metal products (78%up,22%same,0%down) are all continuing to move forward.

On the back of the other improvements the industry is experiencing, optimism is at its highest level for more than 12 years.

Dr Hughes added: "I am delighted with the way our industry has responded particularly across the various sectors. While I see marginal benefits due to the value of the pound against other currencies the vast majority of the improvement is down to hard work and good leadership."