Falling prices curb engineering investment

The latest Quarterly Review published by Scottish Engineering reveals that companies in the manufacturing engineering industry are working hard to maintain their market share but at the expense of profits.

The latest Quarterly Review published by Scottish Engineering, the industry’s support group in Scotland, reveals that companies in the manufacturing engineering industry are working hard to maintain their market share but at the expense of profits which are essential to provide much needed investment in personnel and equipment.

Dr. Peter Hughes, chief executive of Scottish Engineering said: ‘A number of companies throughout the manufacturing engineering sector are taking orders just to maintain their market share and to keep valued members of staff. With prices and margins continuing to fall there is not adequate revenue and our industry finds it very difficult to invest in equipment and training, both of which are vital if we are to maintain and improve our competitiveness.’

The Review highlights a welcome turn around in the fortunes of the electronic sector with 41% of companies reporting increased orders, 30% the same level and 29% reporting a downturn.

Still languishing with a negative balance in companies reporting improved orders and a decrease is the oil and gas sector (22% up, 34% same, 44% down).

Dr. Hughes was less than impressed after hearing UK Chancellor Gordon Brown’s latest Pre-Budget speech.

‘For Gordon Brown to state that the UK economy has grown consistently quarter on quarter for the last five and a half years flies in the face of what we have seen in manufacturing. We have seen varying degrees of recession in the manufacturing sector for the last two years and we are still not yet out of the wood,’ he said.