Press Release – QR December 2016

ENGINEERING INDUSTRY PERKS UP SLIGHTLY

http://scottishengineering.org.uk/wp-content/uploads/2016/12/QR-December-2016.pdf

For the first time in two years, Scotland’s engineering industry appears to be offering hope for the future.

According to our latest Quarterly Review of the industry, there has been an improvement in orders, output and staffing in the final quarter of 2016.  Though, after seven quarters of negative results, this improvement can be seen as coming from a fairly low base.

While the rest of the UK’s manufacturing sector appears to be growing at a greater rate than Scotland’s, Bryan Buchan, our CEO, explained: “We are not yet seeing the benefit of the weak pound due to the simple fact that, excluding oil and gas, the UK accounts for £48bn of Scotland’s total exports, compared to £11.6bn to the EU and £15.2bn to the rest of the world.

“What may provide a benefit to the Scottish manufacturing engineering sector is the decision by the Chancellor in his Autumn Statement to increase spending on infrastructure and productivity.  However, that is for the future and our industry needs more orders in the short and medium term.”

The Review figures show that if order intake for the last three months (39%up, 26%same, 35%down) is compared with the industry’s forecast for the next quarter (22%up, 60%same, 18%down) there is a similar positive four-point result.  This is also reflected in output figures as the last quarter shows (33%up, 45%same, 22%down) compared with an improving forecast for the next quarter (36%up, 42%same, 22%down).

Staffing levels show that the number of employees (22%up, 65%same, 13%down) has increased quite substantially more than the overtime levels (29%up, 44%same, 27%down).

 

Scottish Engineering Leaders Award 2017

This free competition, hosted by Primary Engineer and supported by engineers in Scotland, looks to create links between schools and industry by having engineers visit a classroom and chat about themselves and their work in engineering.  After the visit, pupils are asked: If you were an engineer in Scotland, what would you do? 

The wonderful results have included last year’s winner – a trolley for the elderly, a rotating park bench to ensure dry seats, a magnetic bar code in socks to sort them automatically, etc.

So far, we have had 10,000 pupils register for the competition, so we need all the help we can get to inspire the next generation of engineers.

If you could volunteer a couple of hours to visit a school, you can register here Eventbrite and search for the schools who need engineers here Scottish Engineering Leaders Award Map.

 

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ConnectUp – SME Event – Tue 25 October 2016

INVITATION TO ATTEND

The Weir Advanced Research Centre, part of The Weir Group, are holding a joint event in conjunction with Scottish Power, Doosan Babcock, Subsea7 and Stena Line, aimed at identifying new SME partners.

The two event themes, which reflect the broader innovation needs of the host companies, are Industry 4.0 and Energy Efficiency, and the hope is to attract SMEs working in these areas.

As part of the event, they plan to have various organisations exhibit, including ourselves – Scottish Engineering, as well as Scottish Enterprise, AFRC Innovation Centre and various universities, and more.

The day will consist of several networking breaks between presenters, and SMEs will have the opportunity to interact with exhibitors at these times.

The event is free, and to register please click on the link below:

https://connect-up.eventbrite.co.uk

Venue: Technology & Innovation Centre (TIC), University of Strathclyde, 99 George Street, Glasgow, G1 1RD

Concerns over apprenticeship levy

Comment by Bryan Buchan, Chief Executive.

Engineering companies throughout Scotland are expressing great concern about the impending apprenticeship levy that will come into effect early next year.

The main reason for their concern is the fact that the application of the scheme has been devolved to the Scottish Government, and while employers across England have been made aware by Westminster how they are going to be affected, Scottish employers are completely in the dark.

Starting on 6 April 2017, HMRC will collect a levy from companies throughout the UK with a wage bill above £3m.  This will be paid dependent on where the companies pay their tax.  Some Scottish companies will, therefore, be paying to Revenue Scotland and others to HMRC UK.

We are being inundated by requests from our member companies who want information on how this levy will be collected, when and how often it will be collected, as well as how they can claim their allowances back and how much they can claim.

The basis of this levy is that the UK Government have said that they want to create 3 million apprentices by 2020 across the UK.  In Scotland, I have received information from colleges and training organisations who already fear that there is going to be a significant downturn in the number of essential apprenticeships in key engineering disciplines in the coming year.

That flags up to employers a huge concern that we will once again be facing a deficit in skilled workers in Scotland within an industry where skills are paramount.

Questions have already been asked of the Employability and Training Department of the Scottish Government, but answers have not been received.

The word from politicians is that they cannot provide answers before the autumn statement, which means that it will be December before any clarity is provided, allowing at best four months to set up a system of delivery which already exists in England.

Post Brexit uncertainty creates engineering slump

QR September 2016 – Press Release

The uncertainty surrounding the Brexit vote and the subsequent allusions to another Independence referendum by the First Minister, are exacerbating negative trading conditions for the engineering manufacturing sector in Scotland as witnessed by the results in the latest Quarterly Review of the industry published by Scottish Engineering.

The support group for Scotland’s engineering companies has seen a slump in orders and a sharp fall in output volume in the last quarter as well as a drop in employment levels.

Circumstances outwith the control of the Scottish economy, particularly the fall in Sterling against the Euro and Dollar, have impacted many costs for Scottish businesses.  Bryan Buchan, CEO of Scottish Engineering said: “We appear to have been hit on all fronts. The potential benefits of a weaker pound for exports have yet to be realised and our figures show there has been substantial downturn in export orders. At the same time, we have seen a significant rise in commodity prices, notably metals including nickel and zinc which is impacting directly on companies involved in fabrication and galvanising in particular.”

Order levels have been negative for eight consecutive quarters and have only been worse during the global slump of 2009.

Output volumes (21%up,31%same,48%down) are also at their lowest level since 2009.Staffng levels which have tended to be less volatile of late have dipped considerably (20%up,51%same,29%down) in this third quarter of 2016.

The guest writer in the Review, Lord Andrew Dunlop, Parliamentary Under-Secretary of State also comments on the result of the EU Referendum, stating: “There may be some turbulence ahead as our economy adjusts to this new reality and I fully recognise the concerns and questions which have arisen from the uncertainty of this decision for engineering businesses and their employees.”

He added: “I am pleased that the Treasury acted to secure the status of EU-funded projects, providing certainty in the medium-term on projects which are currently underway. It is important that we make it clear that the UK remains open for business.”

He concludes by suggesting that this Government: “Will hold fast to a vision of the UK that is respected abroad, tolerant at home, engaged in the world and working with our international partners to advance the prosperity and security of our nation, that truly works for everyone.”

Mr Buchan also hopes that the Bank of England’s recent package: “Will promote some improvement which will extend to our sector, but we now look to our new Chancellor Philip Hammond, to step in with further measures to defend our economy.”

BREXIT

Brexit comment by Bryan Buchan, Chief Executive, Scottish Engineering.

At the time of writing, we are starting to feel the force of the predicted maelstrom following the Brexit vote.

From an engineering manufacturing point of view, it is difficult to see any accrued benefit.  While the export market, which comprises Europe, has grown in the number of member states involved, in percentage terms it has fallen in value from some 54% to 42% over 12 years.  Still, however, a very significant market for ourselves, and equally we constitute a substantial market for European countries, notably accounting for 7.4% of German exports and 7% of French.  We are now plunged into an even deeper trench of uncertainty than that around the previous phases post-recession, with companies struggling to foresee the future and facing intangibles in terms of investment validity and potential scenarios for extended stagnation, or indeed reversal of growth.

Chaos prevails in the UK, with internal fracturing of the two major political parties, and a new Prime Minister in Theresa May bringing associated prevarication on the invocation of Article 50 to initiate the process of exit.  It would appear that our strongest ally within the block is the ever-pragmatic German Chancellor Angela Merkel; however, she will be facing an election next year and this should be a point of concern for our principal negotiator.  It is clear that if we wish to retain full access to the EU market in the manner of Norway, that a substantial contribution to EU funding will be called for, as will almost certainly free movement of people within these boundaries.  The promises of the ‘leave’ camp in terms of NHS funding have been exposed for the flagrant lies which they were, and their proponents have now virtually all existed stage left.  Therefore, we have given away a place at the bargaining table, devalued our currency and placed our economy, particularly financial services, at risk – for what?

What has brought us to this point appears to be anger on the part of the less advantaged areas of England and Wales in particular, fuelled by concerns over immigration, globalisation and EU social policies.  There is a stark division in the country with Scotland, Northern Ireland and Greater London clearly pro-EU.

Manufacturers will look to an easing in their export conditions, with the collapse of the Pound; however, this will be offset by significantly higher raw material costs when sourced from either Europe or the US.  One shaft of light might come from the fact that oil is priced in Dollars, and the price per-barrel realised price might now put some marginal fields back into contention in the UKCS, with a concomitant beneficial effect throughout the supply chain.

Engineering sector hit by uncertainty

Speaking on BBC Radio Scotland recently about the situation affecting the engineering industry in Scotland, Bryan Buchan, CEO of Scottish Engineering explained how the current levels of uncertainty were curtailing the industry.

“The Referendum vote is just another tranche of uncertainty and probably even more severe than those that have preceded it”, Mr Buchan explained.  “We are not seeing the type of investment we would expect to see in terms of capital equipment, and I think one of the major concerns now will be how do we attract inward investment when we are outwith the EU”, he added.

Speaking further on the investment situation, he explained how investment was drying up in the short term and that companies have been marking time from pre-Scottish referendum through the UK elections, and now the Brexit vote will also apply.

Mr Buchan said that Scotland’s manufacturing sector exports some 42% of its production to the EU making it an extremely important market, though it had contracted somewhat from 54% in 2002 to the 42% at the end of 2014.  Now emerging markets, he said, like India would be the targets for companies in the immediate future, but he did put a caveat on these activities being really successful, because a number of potential markets like Brazil had put on a range of tariffs making it extremely difficult to export.

He concluded by saying that the fall in the value of the pound would help exports by reducing our relative costs and adding to the value of receipts in Euros, while at the same time increasing the cost of goods brought in to Scotland and the UK.

Bryan Buchan, CEO, Scottish Engineering, speaking on BBC Radio Scotland, Tue 28 June 2016.

Primary Engineer & Scottish Engineering Special Leaders Award 2016

The Scottish Engineering Special Leaders Award (SESLA) is one of the Primary Engineer programmes that is coordinated in Scotland from the Scottish Engineering office in Glasgow.

The fourth edition of the SESLA has been the most popular and most successful to date.  This year, 8500 pupils from 130 schools sent in their amazing inventions.  It was then the unenviable task of the judges to grade the entries, select those inventions they believed should be shortlisted and, in the final stage, choose two winners per year group.  Our judges – drawn from academia, business and professional institutions – met at Scottish Engineering to choose numerous inventions that they considered should be Highly Commended, as well as two illustrations per participating school, to be put on display alongside the winning entries.  It was truly an arduous job.

The winning entries were presented with their trophies in the University of Strathclyde’s Barony Hall on Thursday 9th June 2016.

Scottish Engineering is delighted to be a supporter of Primary Engineer, and a huge thank you must also go to those other Primary Engineer’s supporters: The University of Strathclyde and the Faculty of Engineering; Doosan Babcock and The Institution of Mechanical Engineers.  Our thanks are also extended to all of the Scottish Engineering member companies, whose engineers kindly gave of their time to visit schools and inspire such a high level of creativity and innovation amongst the children.

Other Primary Engineer programmes include: Early Years Engineer, Primary Engineer, Secondary Engineer, The Institution of Primary Engineers, The Institution of Secondary Engineers and the Masters Level course ‘Engineering STEM Learning.  Many thanks to all the Scottish Engineering member companies who help them in their work.

To find out more about the Scottish Engineering Special Leaders Award 2016, please visit: www.leadersaward.com

If you would like to know more about supporting the programme or how to get involved with the SESLA 2017, please contact: editor@leadersaward.com

For more information about Primary Engineering programmes in general, please contact Chris Rochester, Primary Engineer Regional Director for Scotland: chris.rochester@primaryengineer.com

9.9.16 PRIMARY ENGINEER AWARDS

9.9.16 PRIMARY ENGINEER AWARDS

 

 

9.9.16 PRIMARY ENGINEER AWARDS

9.9.16 PRIMARY ENGINEER AWARDS

9.9.16 PRIMARY ENGINEER AWARDS

9.9.16 PRIMARY ENGINEER AWARDS

 

Scottish Engineering Members EU Poll – Press Release re results

Scottish Engineering, the support group for the industry in Scotland, has polled its members on the EU referendum.

From a survey of more than 350 companies, the response rate was 30%.

The questionnaire offered three responses, which resulted in 78% wishing to remain in the EU, 6% wishing to exit, and the final 16% had no preference.

 

 

MANUFACTURING ENGINEERING SECTOR HOLDING STEADY

Trends for the engineering industry in Scotland for the second quarter of 2016 are virtually the same as for the first quarter – suggesting that the manufacturing sector in Scotland is holding steady if not advancing.

 

Bryan Buchan, CEO of Scottish Engineering, who produce the Quarterly Review of the industry’s behaviour said: “It is fair to say that our sector as a whole is suffering from stagnation, borne out of the effects of the long term drop in oil prices coupled to a global economic retrenchment, with very low growth other than in China and India”.

 

The report states that both order intake and output volume are flat, there is no movement in capital investment and prices continue to be squeezed.

 

Within the order intake of both small companies (28% up, 28% same, 44% down) and medium sized companies (23% up, 35% same, 42% down) there are more companies who are seeing their order levels drop that are seeing them improve. This is, of course, reflected in output volume which also has negative returns from both small (32% up, 24% same, 44% down) and medium sized companies (19% up, 49% same, 32% down).

 

Mr Buchan added: “We appear to be marking time in terms of capital investment – partly due to market conditions arising from reduced activity in the UKCS and also in yet another tranche of uncertainty in terms of the imminent EU Referendum. Our sector is little different to the UK economy as a whole where growth slowed in Q1 and is expected to do so further in Q2.

 

“Although CPI inflation remains well below the 2% target and the bank rate is held again at 0.5%, there is optimism that movement in cost growth will come through next year. More immediately, there is some cheer at the time of writing, to see oil prices breach the $50 mark for the first time this year despite failure to agree production caps by Iran and Russia. This gives some hope of a limited recovery within the calendar year.

 

We can also point to some outstanding performances by specialist manufacturers in defence, heavy engineering, fabrication and electricals as evidenced by this year’s array of winners of Scottish Engineering awards”.

 

 

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