The organisation's September Quarterly Review of the manufacturing engineering industry shows that the order intake levels are at -28 (19%up,34%same,47%down) while in the second quarter they stood at -45. Capacity utilisation has also improved considerably since the second quarter of 2009 with figures of -32 (13%up,42%same,45%down) against -49 in the last quarter.

Dr Peter Hughes, Chief Executive of Scottish Engineering is being cautious in his forecast: "We know how difficult it is to predict the end of a recession and while some of our indicators have improved for two quarters, there is not enough evidence for us to say that it is over. I believe, however that it may well be bottoming out."

Areas which would normally give a reading on the situation, like optimism (14%up,52%same,34%down) and investment in training (11%up,67%same,22%down) and capital equipment (10%up,57%same,33%down) have all improved, though like orders they remain negative.

Looking at how the different sizes of company have performed, the order intake for large companies, those with more than 500 employees, has levelled out to the extent that there are as many companies reporting that their orders have fallen as have reported that orders have improved (33%up,34%same,33%down).

Staffing levels continue to fall but, as with other indicators, not so badly as they did earlier in the year. Forecasts for the next three months predict a continuing improvement though not quite breaking into positive figures.

Two sectors which have made a remarkable recovery are electronics whose export orders are firmly positive (43%up,36%same,21%down) and electrical goods (50%up,25%same,25%down) which has been struggling for a number of quarters.

Mr Hughes added: "Our industry has experienced a severe downturn over the last year and it will take some time for that to be turned around. Engineering manufacturing companies are looking for more than just orders to improve, there is also an underlying need for markets to strengthen and for banks to loosen the purse strings to help stimulate growth."

For further information contact Colin McGill on 0141 221 3181 or 07976 224412 or visit the Scottish Engineering website on www.scottishengineering.org.uk