Read the full Q3 2026 Quarterly Review

4 minute

This third quarterly survey of the year maintains an overall upbeat review and outlook for our sector with our headline measures of order intake and output volume remaining pretty positive.  Overall optimism is up again after a concerning drop last quarter, despite even stronger order and output measures in that previous period.  Dig into the detail however and that confidence is driven by medium and large companies for all three, with small companies at best flat or just under in the case of optimism. 

Forecasts are positive across the board, which are welcome for orders, output and staffing, but not so much for prices.  The impact of the implementation of the UK Government’s Steel Trade Measures along with the soon to arrive Carbon Border Adjustment Measures (CBAM) will have a significant part in that outlook. 

If that sounds like a quarterly review that is dammed by faint praise, it’s probably a fair observation given that even the positive aspects – for some – will be tempered by the prospect of further challenges here or on their way. 

One that seems more clearly positive is training intent, with another double-digit quarterly increase (+17%) for the second quarter in a row (+21% in June), matching a trend for staffing intent where this quarter we show a +14% intent to hire on top of June’s +9%. 

That aim to increase training – and staffing – fits well with Scottish Engineering’s launch earlier this month of our Skills Academy, a resource for our sector which has been a year in the making, and an expansion of a thread of our purpose that has existed for over 160 years.  It will bring together practical training, sector insight and development opportunities designed specifically for engineering and manufacturing.  

This initiative has no intention to deliver training where it is already offered as sector specific and tailored to the needs of Scottish Industry.  Our interest lies in using the power of the insight and data we are privileged to receive from our members through the conversations we have every day, or the survey responses they give to us to show where to lead.  

A good example of that is the release of survey data to coincide with the week of the Skills Academy launch on the topic of Artificial Intelligence (AI) adoption rates for usage, training and company strategy. 

The headlines for the usage of AI tools by companies showed that 22% state a majority of their staff are using these tools regularly, and 50% stated a minority of their staff are using these tools regularly, or more briefly almost three quarters of sector companies have adopted regular use of AI tools.   

However, for the same respondents considering the quality of adoption, 68% of responding companies had no formal training provision, whilst 14% had targeted training for defined users, and 13% provided training for all staff in this area.   

A similar picture was revealed for the development and use of an AI strategy within an organisation and here we saw that only 5% of companies had a full AI strategy in use, whilst 21% had an AI strategy in development, and the rest (74%) either had an intention to develop or no plans at present to do so. 

What can we take from this? 

From an AI point of view, we can conclude that the adoption rate for a newish technology is staggering and comparing to the July 2026 UK Office for National Statistics, our sector compares well to general UK businesses.  However, the mismatch between majority regular usage of 72% adoption versus a rate of no formal training of 68% is concerning, and the low rates of defined or planned strategy for AI only add to that unease. 

That awareness however is exactly what informs bodies like our Skills Academy to seek first to understand why that gap exists and then design and deliver the training offer that makes it easy for companies to close it. 

This example might be for AI, but it’s a model that can be repeated across any aspect of training designed to upskill and re-skill staff, and thanks to our member companies continued participation in our quarterly reviews, we have a consistent source of data to do that.

Paul Sheerin
Chief Executive
Scottish Engineering

Read the full Q3 2026 Quarterly Review