The swing back to positive overall order intake continues, and for UK orders it is more widely present across the sectors, and optimism is positive in all. The indices for forecasts are strongly above the line for all measures and all sectors, and it's encouraging to see that the previous quarter’s forecast was once again well matched to this quarter’s actual orders and output. Pricing for UK and Export orders follows the much-needed slowing down on the general rate of inflation, but businesses would need no one to remind them that these are still increasing, albeit at a reduced rate - we will be glad to see that fall further to help with our competitiveness.
Key attention points from this quarter:
- Overall order intake amongst members increased once again by a net 9% with UK orders amongst medium and large companies the strongest driver
- Output volume increased to a net positive of 11%, additional to last quarter’s growth of 9% net increase
- For the coming three months, members forecast a net increase of 27% of businesses having increased orders, with output forecast for a net 20% increase in the same period
- Optimism continues its positive trend from last quarter – overall 19% positive, with all sectors above the line up to 42% positive for medium sized companies. A particular welcome return to positive optimism for our fabricators, the first time above the line in the last year.
The data in this Review were acquired by a survey of Scottish Engineering’s members and certain other manufacturing companies.
29% of members responded
Companies are described as:
Small (<100 employees), Medium (100–500) and Large (>500)
Annual trends
This second quarter indicates a further positive increase in order intake of +9% on the previous quarter, and is joined by output volume which also saw a positive movement of +11% this quarter. Staffing continues its positive intention with now 13 consecutive quarters with an increase in intention of +13%. Exports are flat this quarter with an even number of increase and decline, and capacity utilisation records another positive quarter with a net of +12%, having increased on last quarter.
Order intake
Output volume
Exports
Staffing
UK Orders
Net | Up | Same | Down |
-3% | 30% | 37% | 33% |
UK orders have fallen slightly from last quarter to a net -3% recording a decrease. Small companies have driven this impact, as despite medium and large companies returning +26% and +40% increases, for a consecutive fourth quarter small companies have shown negative returns, a movement to -20% from last quarter. Metal Products, Precision Engineering and Fabricators are for the first time in four quarters reporting positivity (+67%, +43%, & +13% respectively), all moving from negative returns last quarter (-50%, -10% & -20%). Electrical & Electronics and Plant & Machinery are reporting negative returns again, however showing an upward trajectory in comparison to last quarter (from -40% to -25% and -27% to -10% respectively). Manufacturing has fallen from flat (0%) to -17% this quarter of 17%.
Companies | Net | Up | Same | Down |
| Small | -20% | 22% | 36% | 42% |
Medium | 26% | 43% | 40% | 17% |
Large | 40% | 60% | 20% | 20% |
Sectors |
|
|
|
|
Manufacturing | -17% | 21% | 41% | 38% |
Plant & Machinery | -10% | 30% | 30% | 40% |
Metal | 67% | 67% | 33% | 0% |
Precision | 43% | 43% | 57% | 0% |
Fabricators | 14% | 47% | 20% | 33% |
Electrical & Electronics | -25% | 13% | 49% | 38% |
Export Orders
Net | Up | Same | Down |
0% | 33% | 34% | 33% |
Export orders return neither an increase or decrease on last quarter, with equal positive and negative returns. Small companies are showing an improvement on last quarter (0% to +5%). Larger companies have, for the second quarter, reported decreased export orders at -33%, and medium companies show a decline of -5 percentage points with only small companies positive in export orders at +5%. Metal products this quarter, have shown significant positivity on last quarter with an improvement to +100%, followed by Precision Engineering with an improvement also +100%. Although Electrical & Electronics have equal positive and negative returns this quarter, they have improved from -25% to 0%. Plant & Machinery are reporting negative returns this quarter, declining from +30% to a net -14%. Fabricators, although showing a negative return of -11%, have improved on last quarter’s return of -20%.
Companies | Net | Up | Same | Down |
Small | 5% | 36% | 33% | 31% |
Medium | -5% | 33% | 29% | 38% |
Large | -33% | 0% | 67% | 33% |
Sectors |
|
|
|
|
Manufacturing | -15% | 25% | 35% | 40% |
Plant & Machinery | -15% | 14% | 57% | 29% |
Metal | 100% | 100% | 0% | 0% |
Precision | 100% | 100% | 0% | 0% |
Fabricators | -11% | 33% | 23% | 44% |
Electrical & Electronics | 0% | 20% | 60% | 20% |
Optimism
Net | Up | Same | Down |
18% | 35% | 49% | 16% |
Optimism remains positive overall with a net +18% for all companies and sectors compared to last quarter. All sizes of companies remain positive or static for a second consecutive quarter: small (+9%), medium (+42%), larger (0%). All sectors remain positive in their outlook, with Electrical & Electronics, Metal Products and Plant & Machinery being most optimistic (+38%, +33%, and +18% respectively). Manufacturing and Fabricators were flat last quarter showing equal positive and negative returns, however improved this quarter to +8% and +7% respectively. Precision engineering has seen also improvement on last quarter moving from +10% to +14%.
Companies | Net | Up | Same | Down |
Small | 9% | 27% | 55% | 18% |
Medium | 42% | 52% | 38% | 10% |
Large | 0% | 33% | 34% | 33% |
Sectors |
|
|
|
|
Manufacturing | 8% | 35% | 38% | 27% |
Plant & Machinery | 18% | 27% | 64% | 9% |
Metal | 33% | 33% | 67% | 0% |
Precision Engineering | 15% | 29% | 57% | 14% |
Fabricators | 7% | 27% | 53% | 20% |
Electrical & Electronics | 38% | 63% | 12% | 25% |
Output Volume
Net | Up | Same | Down |
11% | 39% | 33% | 28% |
Output volume remains positive this quarter at +11%, vs last quarter. Larger and medium companies remain positive at +60% and +35% respectively however, small companies are reporting a decline from last quarter of -5%. Most sectors are showing positive returns with Metal Products and Fabricators being most optimistic (+100% and +29%). Manufacturing show negative returns for a second consecutive quarter at -27%. Fabricators & Precision Engineering have recorded increases this quarter of +29% and +14% respectively.
Companies | Net | Up | Same | Down |
Small | -5% | 30% | 35% | 35% |
Medium | 36% | 52% | 32% | 16% |
Large | 60% | 80% | 0% | 20% |
Sectors |
|
|
|
|
Manufacturing | -27% | 19% | 35% | 46% |
Plant & Machinery | 18% | 45% | 28% | 27% |
Metal | 100% | 100% | 0% | 0% |
Precision | 14% | 43% | 28% | 29% |
Fabricators | 29% | 43% | 43% | 14% |
Electrical & Electronics | 12% | 50% | 12% | 38% |
Staffing
Net | Up | Same | Down |
13% | 34% | 46% | 20% |
Employee numbers are positive for all sizes of companies, small (+11%), medium (+13%) and large (+50%). Manufacturing shows, for the second consecutive quarter, negativity at -12%, and Metal Products show the most significant increase of +67 percentage points.
Companies | Net | Up | Same | Down |
Small | 11% | 27% | 57% | 16% |
Medium | 13% | 42% | 29% | 29% |
Large | 50% | 67% | 16% | 17% |
Sectors |
|
|
|
|
Manufacturing | -12% | 23% | 42% | 35% |
Plant & Machinery | 27% | 27% | 73% | 0% |
Metal | 67% | 67% | 33% | 0% |
Precision | 29% | 29% | 71% | 0% |
Fabricators | 7% | 40% | 27% | 33% |
Electrical & Electronics | 13% | 38% | 37% | 25% |
Overtime
Overtime has seen a slight improvement this quarter with larger companies reporting the largest increase of +40% (-50% last quarter) matching their increase in UK orders and output volume.
Companies | Net | Up | Same | Down |
7% | 26% | 55% | 19% | |
Small | 2% | 21% | 60% | 19% |
Medium | 10% | 29% | 52% | 19% |
Large | 40% | 60% | 20% | 20% |
Investment
Net | Up | Same | Down |
15% | 28% | 59% | 13% |
Capital investment plans remain positive overall at +15% up on last quarter with larger and medium companies reporting highest increases at 50% and 19% respectively. Small companies also remain positive at +11% on last quarter. Plant and Machinery are reporting equal positive and negative returns on last quarter. Metal Products indicate the highest levels of investment, an improvement of +67% followed by Precision Engineering (+29%) and Electrical & Electronics (+25%).
Companies | Net | Up | Same | Down |
Small | 11% | 25% | 61% | 14% |
Medium | 19% | 32% | 55% | 13% |
Large | 50% | 50% | 50% | 0% |
Sectors |
|
|
|
|
Manufacturing | 12% | 27% | 58% | 15% |
Plant & Machinery | 0% | 18% | 64% | 18% |
Metal | 67% | 67% | 33% | 0% |
Precision | 29% | 29% | 71% | 0% |
Fabricators | 8% | 29% | 50% | 21% |
Electrical & Electronics | 25% | 38% | 49% | 13% |
Training Investment
Although members continue to struggle with their skill challenges across industry, all sizes of companies are reporting increased plans for training investment, with larger companies strongest with a net 67% of companies reporting increased training plans whilst small and medium sized companies also show positive net increases of +30% (22% last quarter) and +26% (18% last quarter) respectively.
Companies | Net | Up | Same | Down |
31% | 38% | 55% | 7% | |
Small | 30% | 36% | 58% | 6% |
Medium | 25% | 35% | 55% | 10% |
Large | 67% | 67% | 33% | 0% |
Capacity Utilisation
Capacity Utilisation remains positive with net +12% of companies reporting that they are at capacity, an increase of 4% compared to last quarter.
Fabricators
Fabricators, for the first time in the past four quarters, are now reporting positive order intake at +20%, a swing from -19% last quarter, and a first positive order intake return since quarter 2 2023. This matches the improvement shown on UK orders to +14%), alongside output volume improving to +29%, and optimism from 0% to +7%.
Forecast
Looking at the next 3 months, forecasts reflect another positive outlook with all size of companies and sectors reflecting expected increases. Large, medium and small companies forecast positive intention to hire employees of +50%, +29% and +33% respectively. Metal Products, Precision Engineering, Electrical & Electronics, Fabricators and Plant & Machinery forecast positivity in all areas (order intake, order exports, prices UK, prices export, output volume and employees). Manufacturing are reporting a decline in order exports (-5%) but positive in all other areas. Metal Products for the third consecutive quarter, has forecast an increase in prices with UK at +67%, exports at +50% . Electrical & Electronics show order exports at +60% prices UK at +13% and exports prices at +20%.
| Net | Up | Same | Down | |
Orders | 27% | 40% | 47% | 13% |
UK Orders | 24% | 36% | 52% | 12% |
Export Orders | 22% | 36% | 50% | 14% |
Output Volume | 20% | 37% | 46% | 17% |
Balance of change %
| Order Intake UK | Orders Export | Prices UK | Prices Export | Output Volume | Employees | |
|---|---|---|---|---|---|---|
| Small | 26 | 33 | 29 | 18 | 21 | 31 |
| Medium | 20 | 4 | 3 | 8 | 16 | 29 |
| Large | 20 | 33 | 0 | 0 | 40 | 50 |
| Metal Products | 67 | 50 | 33 | 50 | 67 | 33 |
| Precision Engineering | 29 | 50 | 43 | 50 | 43 | 43 |
| Electrical & Electronics | 38 | 60 | 13 | 20 | 63 | 50 |
| Fabricators | 20 | 0 | 13 | 10 | 14 | 47 |
| Manufacturing | 8 | -5 | 16 | 5 | 23 | 19 |
| Plant & Machinery | 10 | 43 | 0 | 0 | 9 | 9 |