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