| The Going Gets Tough |
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The credit crunch has finally hit the manufacturing engineering industry according to the latest survey by Scottish
Engineering, the support group for the sector. The latest Quarterly Review reports that order intake has fallen for the first time in almost five years. Another important issue within the survey points out that while prices have risen in both UK and export markets they have not matched the rises in fuel, energy or raw materials so margins have tumbled. As was to be expected the oil & gas sector continues to plough a strong furrow, but machine shops and mechanical engineering have been hit hard. Dr Peter Hughes, Chief Executive of Scottish Engineering said: “The one area that goes against the negative trend is large companies which are still reporting a positive order intake. The majority of companies are also reporting ongoing positive results in terms of output volume, but these are based on the positive intake figures for previous months.” Despite the general drop in order intake (31%up,35%same,34%down) optimism is still high in the electronics and oil & gas sectors as well as in large companies. UK prices across all size and sector (38%up,56%same,6%down) are extremely positive as are export prices (23%up,69%same,8%down) but when we look at UK margins (5%up,62%same,33%down) and export margins (3%up,70%same,27%down) we see that there is a huge gap between negative margins and the positive prices. “On a more positive note,” Dr Hughes added, “The weakening of sterling against the Euro will certainly assist with exports and companies who have been working hard on improving their productivity via a variety of lean programmes will be better placed to weather the storm. For further information contact Colin McGill on 0141 221 3181 or 07976 224412 or visit the Scottish Engineering website on www.scottishengineering.org.uk |