1 March 2013 Last updated at 01:40 ET

Engineers in Scotland report drop in orders

Scottish engineering says despite some negative data, the outlook is positive

Engineering firms in Scotland have reported a fall in orders and output but they remain optimistic about their fortunes.

A survey from the trade body Scottish Engineering found the fall in output was the first in more than two and a half years.

However, many of the companies surveyed said they had plans to invest.

Employment levels also continued to grow for small and medium-sized companies but not for larger firms.

Skills shortages have been a constant concern for the engineering sector.

Bryan Buchan, chief executive of Scottish Engineering, said: "Throughout the country there are unfilled vacancies for engineers in various skills from machine operators to design engineers.

We plan to initiate a range of activities to actively address this major inhibitor to our growth."

Mr Buchan said companies were confident their fortunes would pick up in the near future.

He said: "While it is apparent that order intake has softened, optimism remains positive, as do forecasts for the next three months in terms of trading outlook."