August’s top 10 engineering business stories

Each month, we pick 10 of the most notable news stories from The Engineer’s Business Briefs archive.

Despite reports of confidence among UK manufacturers in July, this month the CBI has revealed a deterioration in companies’ total and export order books. The CBI’s latest monthly Industrial Trends Survey also showed that expectations for output growth have flattened. Of the 456 manufacturers responding to the survey, 15 per cent said that order books were above normal, while 36 per cent reported that order levels were below normal. The balance of -21 per cent represents the lowest return since the end of last year (December -23 per cent).

In addition, job board site and Air Energi, a provider of manpower solutions to the energy sector, have suggested that the global oil and gas industry is also facing difficulties. According to a report entitled The global oil & gas workforce survey: Expectations for hires and pay rates in the oil and gas industry H2 2012, both employers and employees are facing a number of challenges. The report highlighted concerns over access to those with the necessary skills, a shortage of specific disciplines and pressure caused by local content regulations.

It’s not all bad news, though. The same report revealed a resurgence of activity in the sector and found that operators and contractors have a largely positive outlook about the many projects under way or planned worldwide.

Reinforcing this positivity, Oil & Gas UK’s business confidence index for the second quarter of 2012 has demonstrated that Britain’s upstream oil and gas industry is maintaining a stable and positive outlook. The overall index reportedly rose from 64 to 65 on a 100-point scale — the highest since the series began almost four years ago.

The electronics industry also seems to be experiencing signs of recovery. Industry association IPC has revealed that year-on-year sales growth across the global electronics supply chain was mixed in the second quarter of 2012 but is now moving in a positive direction. According to the summer edition of the IPC’s quarterly report, Electronics industries market data update, reduced growth forecasts from China and continued worries about Greece have reinforced concern about a global economic slowdown. Although domestic growth in China is showing resilience, exports remained sluggish in the second quarter owing to the slow recovery in the US and the contracting economy in Europe. Meanwhile, leading indicators in North America show signs of stalled growth in the economy in the second quarter but point to a resumption of modest growth in the second half of 2012.

On the subject of electronics, the UK government has announced that it is to invest up to £1.25m in feasibility studies to encourage the development of energy-efficient computer technologies through a collaborative demonstrator competition managed by the Technology Strategy Board, the EPSRC and the Defence Science and Technology Laboratory. Applications should focus on the design and development of ‘green’ hardware and software for large-scale systems, as well as mobile devices and embedded chips.

Scotland is also going green this month — by launching a fleet of hydrogen-powered buses. Industrial gases and clean energy business BOC is providing the refuelling technology as part of the project, which includes funding from the Scottish government, Scottish Enterprise, the Technology Strategy Board and the European Fuel Cells and Hydrogen Joint Undertaking. Scotland hopes to have 10 buses operating on the streets of Aberdeen by 2014. The zero-emission buses will be operated on First and Stagecoach bus routes in the city by early 2014 and refuelled at Scotland’s first commercial-scale hydrogen refuelling station, which will be owned and operated by BOC.

On the transportation front, MTL Group has been awarded a contract to supply fabricated armoured hulls to Panzer Technologies for its Mamba armoured vehicles. The vehicles, which are intended for use in peacekeeping operations, will be manufactured at MTL’s UK headquarters and will then be shipped to South Africa ready for final assembly.

In another UK-based defence application, Qinetiq has been awarded a contract worth £6.4m by Ministry of Defence (MoD) scientists to develop key aspects of a four-year programme of intelligence, surveillance, target acquisition and reconnaissance (ISTAR) research. The ISTAR Concepts and Solutions Engine Room programme is designed to provide a collaborative interface to draw on innovative solutions from a wide supply base — MoD, industry and academia — to address ISTAR-related challenges across the defence sector.

And finally, no business round-up would be complete without some company results. First up this month is Vestas Wind Systems, which generated revenue of €1.6bn (£1.3bn) in the second quarter of 2012 — an increase of 15 per cent on the same period in 2011. EBIT before special items declined by 48 per cent to €40m, while the EBIT margin before special items was 2.5 per cent — an improvement of 21 percentage points compared with the loss-making first quarter of 2012. EBIT after special items was €18m.

CADCAM software developer Delcam, meanwhile, has announced record sales for a six-month period during the first half of 2012. Sales to 30 June 2012 increased by 15 per cent over the same period last year to £22.9m. Pre-tax profits for the period were £2.09m. According to the company, sales of its new software licences have increased along with the take-up of software maintenance contracts — not only in its established markets of automotive and aerospace but also in newer areas such as the dental sector.