Engineering orders show sharp dip

http://news.bbc.co.uk/go/rss/-/1/hi/scotland/7760811.stm

Version 0 of 1.

Scotland's engineering companies have seen their sharpest fall in orders for five years.

The latest Quarterly Review from Scottish Engineering shows that the global financial crisis has finally caught up with the sector.

New orders for both the UK and export markets are reported to be negative for the last three months and forecasts are that this situation will continue.

Optimism among firms has fallen to its lowest level for seven years.

Then, the electronics industry suffered its worst ever slump.

The Chief Executive of Scottish Engineering, Peter Hughes said "Companies have had a severe jolt to their confidence and our SMEs, (small and medium-sized enterprises) in particular are finding that their bankers are proving to be far from helpful." Scotland's manufacturing companies are now leaner and meaner than they have ever been Peter HughesScottish Engineering

He said there was growing anger from these companies who were being hit by increasing bank charges, despite most banks receiving government aid and being urged by the government to help businesses trade through this crisis.

Larger engineering firms are more confident about employment levels, but many smaller firms are already laying off staff.

Peter Hughes said "We have had more inquiries about about redundancies in the last few weeks than we've had in the last five and a half years."

He said 20,000 jobs had already gone from the construction industry.

But unlike the electronics downturn seven years ago, when 30,000 jobs were lost, he said this time he had heard of no more than 20 job cuts going at a time.

Remaining upbeat

This recession is more likely to cause a "drip drip" redundancy effect.

Engineering companies have experienced a sharp drop in demand in the last six weeks and the the biggest problem is the degree of uncertainty as 2009 approaches.

Despite the negative survey results, Peter Hughes is remarkably upbeat.

Over the past few years many engineering companies have been undergoing a business improvement scheme to boost productivity.

Mr Hughes said this means that Scottish manufacturers should be better placed to weather the recession: "Scotland's manufacturing companies are now leaner and meaner than they have ever been."