Scottish Engineering’s first quarterly report of 2023 has confirmed eight consecutive quarters of order and output growth, a continuous run beaten only once since the turn of this millennium.
Order intake was positive for a net 32% of Scottish Engineering members, driven by UK orders with exports recovering from flat to single digit positive.
Output volume increased 43% of companies, a net balance of 22% overall in the last quarter, with a forecast increase for 58% of businesses for a net 45% increase in the coming quarter.
Optimism increased once again with a net 23% of respondents recording increased confidence, and only 15% indicating falling optimism.
“2023 sets off with a very positive outlook for the year, with overall data in the first quarter demonstrating a confident upward trajectory,” said the report.
“Staffing intent has increased slightly on last quarter, reflecting the continuing gap in industry to recruit staff with essential skills.
“The reported increased output volume (+30%) matches the increased capacity utilisation (+31%) which is above 30% for only the third time in the last eight years.”
UK orders remained positive across all sizes of companies, with medium sized companies declaring the greatest improvement at 40%.
Smaller companies were not far behind with a balance of change of 30%.
Most sectors remained positive with plant and machinery recording an increase of 78% this quarter.
The electrical and electronics sector improved from last quarter, and, although still negative, has improved by 18%.
Precision engineering and fabricators show positive returns, with balances of change of +33% and +31% respectively.
Export orders for larger companies improved on last quarter by 50%.
Small companies showed a slight decline with a balance of change of -2%. Medium companies showed a healthy increase in their balance of change by 25%.
Precision engineering, plant & machinery and manufacturing are recording positive balances of change at 60%, 29% and 10%.
“Looking at the next three months, forecasts remain positive for all company sizes in most areas,” said the report.
“Plant & Machinery’s outlook is the most promising in all areas except for Orders export which remains flat, however, they show the highest increases in Order intake (+56%), Prices UK (+56%), Prices export (+50%), Output volume (+67%) and employees (+33%).
“Precision Engineering shows the largest increase in Employees (+83%) and is equal in Output volume (+67%) and Prices UK (+50%).
“Medium sized companies are still showing the highest in UK prices (+48%), representing a decline of 15% from last quarter.
“Order intake remains a concern for Metal Products with another decline in the quarter of 40%, an increase of -15% from last quarter and Electrical & Electronics reporting a similar decline this quarter of -33% (+20% last quarter) – the worst decline this quarter with a balance of change of -53%.
“Prices Export and Prices UK indicates positivity for all sizes of company and all sectors.
“Larger companies optimism for recruitment shows a decline from last quarter at -14% but their optimism remains high for order and price exports, both at +50%.
“In summary, this quarter shows that all size of company and sectors are forecasting improvements in most areas for the coming quarter.”