Engineering firms reported an upturn in growth and profitability in the last quarter of 1996. And they have increased goods and services bought or produced in anticipation of future orders.
But delays in payment and outstanding debt mar an otherwise positive outlook. These have reached their worst levels since the second half of 1995.
These are the main findings of the latest survey of UK industry by credit insurance company Trade Indemnity.
Firms across all sectors noticed an increase in sales, with timber, furniture and paper manufacturers reporting the highest increases in activity.
Trading has also improved for steel stockholders, as the destocking of last year finally comes to an end.
In general, both export and domestic demand are improving profitability, with food manufacture and distribution leading the way.
Companies located in Wales, and those with an annual turnover in excess of £50m, are also gaining from the higher activity levels.
Encouraging signs are emerging from chemical, plastics and rubber manufacturers, whose activity has returned to an upward trend.
Payment delays, averaging 25 days from UK customers, were the longest since the third quarter of 1995.