Engineering confidence grows but there are concerns

BiFab was initially saved following Scottish government intervention but later went back into administration

Confidence is growing among Scotland's engineering firms although there are concerns about rising prices, supply shortages and skills.

The latest survey evidence from the Scottish Engineering trade body points to order intake, the volume of output, exports and staffing all going from negative to positive in the second quarter of the year.

The outlook for the next three months has also picked up.

Some firms have had a much tougher time.

Precision machine shops have not seen orders recover, because their main customers are in aviation and the oil and gas sector, and both remain very subdued in placing new orders.

There are concerns also with the supply of materials, with chief executive Paul Sheerin citing problems from metals to plastics, and cardboard to hydraulic oils.

He said it is unclear if Covid or Brexit is the main reason, but prices have been going up as a result, and with supply chains disrupted, this can be an opportunity for other Scottish firms to step in

Mr Sheerin said: "Shorter supply chains are more resilient supply chains, and can also be more cost-effective. So let's look to maximise the value we can have from suppliers here on our doorsteps."

He also highlighted the challenge of finding people with the right skills. He said redundancies in recent months have mainly been retirements, taking away valued experience. Yet the number of apprenticeship starts has been halved.

In a wider take on business activity and sentiment, the regular Bank of Scotland monitor, with a sample of 95 companies, found confidence growing to the highest level since February last year, with more Scottish firms expecting to hire staff.