Q1 update

Scotland’s engineers see return of order growth

Engineers have seen encouraging signs of recovery

Scotland’s manufacturing sector showed a swing back to positive overall order intake in the first quarter which has raised optimism for the coming three months, according to trade group Scottish Engineering.

However, despite inflation beginning to stabilise, the challenge of wage inflation and energy costs hang over the sector and are reflected in forecasts for price increases.

Scottish Engineering said businesses need margin to survive, “but concern for our competitiveness outside the UK creates a certain uneasiness”.

The second half of 2023 saw at best a cooling picture for orders and output, particularly order input which swung negative after two years of post-pandemic recovery, said SE’s latest survey.

“So its return to being above the line catches our eye as the most directly geared indicator for our sector. It’s backed by some noticeably strong forecast numbers across the board, but especially for orders which reflects the highest outlook in two years and this combination helps drive the pick-up in optimism also reported.”

Scottish Engineering chief executive, Paul Sheerin, added: “This first survey of 2024 shows encouraging signs that Scotland’s manufacturing sector is recovering from the softer market demand we saw in the back half of last year.

“Aerospace, defence and energy in particular are busy and in some cases stretched, and the gains forecast elsewhere we hope to see turn to a reality and a stronger take up of capacity more evenly distributed.

“A little confidence boost from a recovering interest rate as inflation continues to stabilise could go a long way to help boost that”

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