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Industry energy costs ‘front and centre’ for Scotland’s engineering sector

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he impact of growing industry energy costs is “front and centre” for members of Scotland’s manufacturing and engineering sectors, a report has said.

Scottish Engineering’s third review of 2022, released on Friday, said the issue has been “overshadowing what would normally be a notable high of a record six quarters of order and output growth”.

The report highlights that while many companies have full order books, they are are still having to take advice on the consideration of voluntary liquidation due to the energy price hikes.

The association also found that a third of the study’s respondents said the changes to energy prices will put their business at risk.

These responses – especially relating to business sustainability – are a wake-up call

But Scottish Engineering said it was keen to underline the fact that more than half of respondents are yet to experience the impact due to current contracts expiring in 2023 or 2024.

It said those who had reported being impacted saw an average increase of more than three and a half times what they were paying before.

Some 62% said they expected to only be able to partially recover the amount spent on energy costs through price increases, while 23% revealed they will not be able to recover it at all.

Paul Sheerin, chief executive of Scottish Engineering, said: “For an industry that prides itself on facing challenges without drama, these responses – especially relating to business sustainability – are a wake-up call to the damage that could be inflicted unless the whole energy crisis is addressed, not just the consumer energy pricing impact.

“Our manufacturing sector provides high-quality employment, yet the current industrial energy outlook places that employment at risk, and that is the last thing our society currently needs.

“A time of crisis calls for action, and so an end to the empty leadership space in the UK Government is better late than never, and it is essential that the space is filled by a commitment to avert the disastrous course we are currently on.”

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