Overall order intake falls just negative and is joined for the first time in four years by output volume which also just dips below the line. Contrasting this and perhaps surprising is optimism which has maintained its positive status for the ninth quarter in a row, perhaps explained by a matching upbeat forecast for orders and output, with five of our six broad sectoral categories returning a strong outlook. A word of caution should be applied in that three months ago we reported positive forecasts that have not been reached in this quarter, and here we hope this reflects a delayed arrival that will now arrive in the final quarter for 2024. A final mention to Staffing intention which now reaches its fourteenth quarter of positive plan to hire – a statistic we see as a symptom of a wider challenge that we will return to.
Key attention points from this quarter:
- Overall order intake amongst members fell negative to a net -3% with export orders the stronger driver for reduction
- Output volume also dipped to a net negative of -3%, ending a run of thirteen quarters of positive output
- For the coming three months, members forecast a net increase of 18% of businesses having increased orders, with output forecast for a net 26% increase in the same period
- Staffing continues a positive intent to hire of +6%, along with a linked +26% training intent for the coming quarter
The data in this Review was acquired by a survey of Scottish Engineering’s members and certain other manufacturing companies.
31% of members responded
Companies are described as:
Small (<100 employees), Medium (100–500) and Large (>500)
Annual trends
The third quarter indicates a decline in order intake of -3% on the previous quarter, together with output volume and exports which also saw a negative movement of -3% and -15% respectively. Staffing continues to show positive demand for the 14th consecutive report, at +6% this quarter. Capacity utilisation records another positive quarter, with a net of +5%.
Order intake
Output volume
Exports
Staffing
UK Orders
Net | Up | Same | Down |
-6% | 26% | 41% | 33% |
UK orders record a second consecutive decrease, to a net -6%. Small and medium companies have impacted this decline (-8% and -4%), with larger companies having equal positive and negative returns this quarter. Although Manufacturing and Electrical & Electronics have equal positive and negative returns this quarter, they have improved from -17% to 0% and -25% to 0% consecutively. This quarter, Metal products, Precision Engineering and Fabricators are showing a decline (-50%, -30% & -8%), all moving from positive returns last quarter (67%, 43%, 14%). Plant & machinery are reporting negative returns again, with a slight downward trajectory in comparison to last quarter, (from -10% to -17%).
Companies | Net | Up | Same | Down |
| Small | -8% | 28% | 35% | 37% |
Medium | -4% | 23% | 50% | 27% |
Large | 0% | 20% | 60% | 20% |
Sectors |
|
|
|
|
Manufacturing | 0% | 26% | 48% | 26% |
Plant & Machinery | -17% | 25% | 33% | 42% |
Metal | -50% | 25% | 0% | 75% |
Precision | -30% | 10% | 50% | 40% |
Fabricators | -8% | 17% | 58% | 25% |
Electrical & Electronics | 0% | 40% | 20% | 40% |
Export Orders
Net | Up | Same | Down |
-15% | 22% | 41% | 37% |
Export orders have fallen to a net -15% overall, after recording a flat figure last quarter. All sizes of companies have driven the decrease, with smaller companies most impacted, recording a movement of -18% (+5% last quarter). Although larger companies have, for the third quarter, reported decreased export orders at -20%, there is an upward trajectory (-33% last quarter). Plant & Machinery and Fabricators have equal positive and negative returns this quarter, but have improved from -15% to 0% and -11% to 0% respectively. Electrical & Electronics also have equal positive and negative returns, as last quarter, however reporting that export orders have grown since last quarter from +20% to +33% . Metal Products, Precision Engineering and Manufacturing are reporting negative returns of -50%, -25% & -21% sequentially, a fall for all (+100%, +100% and -15% respectively).
Companies | Net | Up | Same | Down |
Small | -18% | 22% | 38% | 40% |
Medium | -8% | 22% | 48% | 30% |
Large | -20% | 20% | 40% | 40% |
Sectors |
|
|
|
|
Manufacturing | -21% | 21% | 37% | 42% |
Plant & Machinery | 0% | 25% | 50% | 25% |
Metal | -50% | 25% | 0% | 75% |
Precision | -25% | 13% | 49% | 38% |
Fabricators | 0% | 20% | 60% | 20% |
Electrical & Electronics | 0% | 33% | 34% | 33% |
Optimism
Net | Up | Same | Down |
8% | 29% | 50% | 21% |
Optimism remains positive overall with a net +8% for all companies and most sectors. All sizes of companies remain positive for a third consecutive quarter: small (+1%), medium (+22%), large (+20%). Manufacturing continues to remain positive in their outlook at +11%, (8% last quarter), followed by Plant & Machinery at +8% (from +18%). Metal Products and Precision Engineering are flat with equal positive and negative returns this quarter however Electrical & Electronics and Fabricators are both reporting negative returns of -10% and -8%, a movement from positivity last quarter of +38% and +7% respectively.
Companies | Net | Up | Same | Down |
Small | 1% | 25% | 51% | 24% |
Medium | 22% | 41% | 40% | 19% |
Large | 20% | 20% | 80% | 0% |
Sectors |
|
|
|
|
Manufacturing | 11% | 25% | 61% | 14% |
Plant & Machinery | 8% | 33% | 42% | 25% |
Metal | 0% | 25% | 50% | 25% |
Precision Engineering | 0% | 30% | 40% | 30% |
Fabricators | -8% | 17% | 58% | 25% |
Electrical & Electronics | -10% | 30% | 30% | 40% |
Output Volume
Net | Up | Same | Down |
-3% | 32% | 33% | 35% |
Output volume, for the first time since 2020 has seen a decline of -3% overall. Larger companies remain positive at +20%, smaller companies are flat this quarter with equal positive and negative returns, whilst medium companies show negative returns of -15%. Metal Products and Precision Engineering are showing equal positive and negative returns on last quarter. Plant & Machinery, Electrical & Electronics and Fabricators are showing negative returns (-42%, -40% and -33%), a decline on last quarter.
Companies | Net | Up | Same | Down |
Small | 0% | 32% | 36% | 32% |
Medium | -15% | 26% | 33% | 41% |
Large | 20% | 60% | 0% | 40% |
Sectors |
|
|
|
|
Manufacturing | 7% | 36% | 35% | 29% |
Plant & Machinery | -42% | 8% | 42% | 50% |
Metal | 0% | 25% | 50% | 25% |
Precision | 0% | 30% | 40% | 30% |
Fabricators | -33% | 17% | 33% | 50% |
Electrical & Electronics | -40% | 20% | 20% | 60% |
Staffing
Net | Up | Same | Down |
6% | 30% | 46% | 24% |
Employee numbers are positive for smaller companies (+10%), static for larger companies (0%) with equal positive and negative returns, and a decline for medium companies (-3%). Manufacturing shows, for the third consecutive quarter, negativity at -15%. Electrical & Electronics show the most significant increase of +30 percentage points.
Companies | Net | Up | Same | Down |
Small | 10% | 29% | 52% | 19% |
Medium | -3% | 30% | 37% | 33% |
Large | 0% | 40% | 20% | 40% |
Sectors |
|
|
|
|
Manufacturing | -15% | 14% | 57% | 29% |
Plant & Machinery | 8% | 33% | 42% | 25% |
Metal | -25% | 25% | 25% | 50% |
Precision | 20% | 30% | 60% | 10% |
Fabricators | 0% | 17% | 66% | 17% |
Electrical & Electronics | 30% | 40% | 50% | 10% |
Overtime
Overtime has seen a slight decline this quarter with larger companies reporting the largest decrease of -20% (+40% last quarter). Similarly, the same applies for smaller companies (-8%) reflecting their decrease in both UK and Export orders.
Companies | Net | Up | Same | Down |
-3% | 21% | 55% | 24% | |
Small | -8% | 19% | 54% | 27% |
Medium | 12% | 31% | 50% | 19% |
Large | -20% | 0% | 80% | 20% |
Investment
Net | Up | Same | Down |
19% | 32% | 55% | 13% |
Capital investment plans remain positive overall at +19%, up on last quarter with all sized companies reporting positivity: Large (+60%), Medium (+26%), Small (+14%). Metal products are reporting equal positive and negative returns on last quarter. Electrical and Electronics indicate the highest level of investment, an improvement of +50%, followed by Manufacturing (+26%) and Precision Engineering (+11%). Fabricators and Plant & Machinery show negative returns (-25% and -9%).
Companies | Net | Up | Same | Down |
Small | 14% | 30% | 54% | 16% |
Medium | 26% | 33% | 60% | 7% |
Large | 60% | 60% | 40% | 0% |
Sectors |
|
|
|
|
Manufacturing | 26% | 30% | 66% | 4% |
Plant & Machinery | -9% | 27% | 37% | 36% |
Metal | 0% | 25% | 50% | 25% |
Precision | 11% | 22% | 67% | 11% |
Fabricators | -25% | 0% | 75% | 25% |
Electrical & Electronics | 50% | 60% | 30% | 10% |
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 +40% reporting increased training plans whilst small and medium sized companies also show positivity at +26% and +26% respectively.
Companies | Net | Up | Same | Down |
26% | 35% | 56% | 9% | |
Small | 26% | 36% | 54% | 10% |
Medium | 26% | 33% | 60% | 7% |
Large | 40% | 40% | 60% | 0% |
Capacity Utilisation
Capacity Utilisation remains positive with net +5% of companies reporting that they are at capacity.
Manufacturing
Manufacturing, for the first time in the past five quarters, are now reporting positive order intake at +14%, a swing from -8% on last quarter after remaining flat for two consecutive quarters (Q4 of 2023, and Q1 of 2024). This matches their output volume improving to +7% (from -27%), investment from +12% to +26% and optimism from +8% to +11%.
Forecast
Looking at the next 3 months, forecasts reflect a mostly positive outlook with all sizes of companies and sectors. Large, medium and small companies forecast positive plans to hire employees for the second quarter at +40%, +11% and +24% respectively. Manufacturing forecast positivity in all areas (order intake, order exports, prices UK, prices export, output volume and employees) with larger companies intimating the same. Metal products for the fourth consecutive quarter, has forecast an increase in prices with UK at +50%, exports at +50%. All sectors report positivity for output volume and employees for a second consecutive quarter. Plant & Machinery show order intake UK at +42% however a decline in prices UK and priced exports at -8% and -25% respectively. Overall, all sizes and sectors are seeing mostly positivity in some or all areas and the outlook going forward remains positive. Historically, quarter three tends to show a slight decline, likely due to holiday season, and these forecasts suggest we may see an improvement in results next quarter.
| Net | Up | Same | Down | |
Orders | 18% | 38% | 42% | 20% |
UK Orders | 16% | 34% | 48% | 18% |
Export Orders | -2% | 24% | 50% | 26% |
Output Volume | 26% | 43% | 40% | 17% |
Balance of change %
| Order Intake UK | Orders Export | Prices UK | Prices Export | Output Volume | Employees | |
|---|---|---|---|---|---|---|
| Small | 16 | -10 | 10 | 4 | 25 | 24 |
| Medium | 15 | 13 | -4 | -9 | 22 | 11 |
| Large | 20 | 20 | 40 | 40 | 60 | 40 |
| Metal Products | -25 | -25 | 50 | 50 | 0 | 25 |
| Precision Engineering | 10 | -13 | -10 | 0 | 0 | 10 |
| Electrical & Electronics | 22 | 11 | 10 | 0 | 40 | 50 |
| Fabricators | 25 | -20 | 8 | -20 | 17 | 17 |
| Manufacturing | 30 | 17 | 7 | 4 | 43 | 18 |
| Plant & Machinery | 42 | 0 | -8 | -25 | 33 | 25 |