SCOTTISH engineering firms have seen output, orders and staff numbers fall, according to research from the sector's trade body.

The Scottish Engineering Quarterly Review for March 2015 suggests slowing growth in China, the ongoing troubles in the eurozone and Russia and low oil prices were the main factors in the difficulties experienced by domestic firms in recent months.

Optimism dipped into negative territory for the first time since October 2012 while order intake, at -1, was negative for the second time in the past three quarters.

Small companies appear to be the ones suffering the worse decline in orders with large businesses flat and medium enterprise in positive territory.

The research uses a net balance between reports of increase and decreases or levels staying the same.

Both export and domestic orders were in negative territory while output levels slumped to -12, a low not seen for more than three years.

Along with reductions in the numbers of employees there was also a fall in the amount of overtime work which was needed.

With a -2 reading it was the first time since the second quarter of 2010 that employee numbers have fallen into negative territory.

Bryan Buchan, chief executive of Scottish Engineering, said: "We are experiencing an immediate and unfortunate effect in demand for those companies engaged in the very diverse supply chain for oil and gas.

"This has had a direct effect by reducing staffing levels, cutting overtime and impacting adversely on overall optimism throughout the industry."