Scottish engineering sector hit by ‘global forces’

The order intake levels have dipped into negative territory after five consecutive months of positive trading. Figures for output volumes have dropped by 18 points but still remain positive. Scottish Engineering said it thought global forces were having a detrimental effect on the industry in Scotland, particularly as regards exports. Bryan Buchan, chief executive, said: "The recovery in the US which I believe is largely driven by domestic trade is being aided by the effect on energy costs of fracking. This is offset by the remaining fragility around the Eurozone with individual countries still in a perilous economic situation, worsened by relatively high wage inflation in France and Italy in particular over recent years." He added: "The whole adverse mix is exacerbated by the effect of sanctions on Russia, compounding their economic decline and a slowdown in Chinese growth caused by an apparently untenable debt to GDP ratio." There was, said Scottish Engineering, also a possibility that there has been a seasonal dip in activity throughout the manufacturing sector. "While the overall orders for the third quarter (33% up, 30% same, 37% down) are negative, the forecast for the next three months in overall orders (35% up, 57% same, 8% down) is much more positive. "This is also reflected in output volume which for the last three months (36% up, 35% same, 29% down) is very low, but for the next quarter (34% up, 50% same, 16% down) is much more upbeat." Buchan concluded: "This quarter has seen a very positive response from our members who, in common with the rest of the country, are undoubtedly suffering from Referendum fatigue and are welcoming the prospect of moving forward in the last quarter of the year."