Outlook uncertain for Scottish engineering despite 'tentative signs of improvement'

Scotland’s engineering sector is showing “tentative signs of improvement” but the outlook is far from clear.

In its latest review, Scottish Engineering expressed 'significant concerns' for aerospace and oil and gas demand recovery in the year ahead.

Releasing its final review of 2020, Scottish Engineering pointed to some improvement in key indicators, which “provides some optimism for 2021”.

However, industry leaders said concerns remain that the hardest hit sectors would see slower recovery as their demand lags.

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Key areas including orders, output, exports and staffing showed “considerable” improvement in the latest snapshot, with companies reporting that further plans for redundancy have fallen from 60 per cent in the previous quarter to 21 per cent. Some 15 per cent of member firms are unsure on the outlook due to a lack of business forecast clarity.

The industry organisation said the planned vaccination programme provided optimism for 2021 but it also expressed “significant concerns” for aerospace and oil and gas demand recovery in the year ahead. Brexit also remains “a cause for concern”.

Scottish Engineering’s chief executive Paul Sheerin said: “It would be easy to look at this report and highlight the positive aspects, as they are certainly there and we are all keen to find them at the end of a difficult year.

“Caution remains however, particularly for those areas where recovery looks further away, in sectors where the competition is truly global.

“The winter economic support package from the UK government is genuinely welcomed, but come spring we need to ask whether we want to retain the strength we have in these sectors, and act to provide sector specific support to enable their survival.”

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