In late May this year, our team at Scottish Engineering reviewed our ready-to-publish survey results from members with a strong sense of caution, and a trusted calculator to double check the numbers. We acknowledged at the time that the improvements in business sentiment were unfortunately not entirely across the board, but the size and scale of the majority change to positive honestly seemed too good to be true.

Such a canny approach was not just because we are downbeat pessimists, but because we had done our homework in reviewing the recovery path of recessionary impact on manufacturing engineering in Scotland back to the late-1980s, and each one had underlined that regardless of the speed of the onset of decline, recovery is measured in incremental, pedestrian-paced improvements. Yes, to be fair, none of the entry profiles could compare to the global switch-off that happened in March 2020, but with the steep gradient and magnitude of the collapse, it seemed a reasonable expectation that its rehabilitation would not follow anything like symmetry, having dismissed the hope of a wished-for V-shaped recovery as being just hope. At the end of this month, the survey results we are collecting as we speak will be live, and whilst results to come will shape the final picture, I am relieved to say that for now the results look like a continuation of overall improvement.

So, I got the forecast for the pace of recovery wrong – anything else to admit while we are being honest? Well, material pricing and availability was and steadfastly remains probably the most significant brake on an otherwise improving outlook, and in June I made a statement about seeing the light at the end of the tunnel, which now looks like the train coming the other way.

The impact of materials scarcity and cost has been plainly apparent to us as consumers and businesses, as waiting lists for new cars resulting from semiconductor shortages extend, and second-hand car pricing has shown increasing demand along with average price rises of more than 17%. Modern cars can use up to 1,400 semiconductor devices per car, and as a result Peugeot have reverted to installing older technology analogue gauges in their 308 model to help them stretch out the limited supplies they have.

Taking metals for its obvious importance to manufacturing, limited material availability for flat steel has pushed coil to the highest level ever recorded, with pricing more than double in 12 months. Aluminium has increased by almost 50% since last September, Copper has hit increases slightly above that, and zinc only looks reasonable by comparison with a 25% rise in the same period.

Another essential is industrial coatings, and here resins for liquid and powder coatings have experienced double-digit-percentage growth in pricing every month since the end of 2020, and more than 50% in the months of May and June. The list goes on – plastics, cardboard corrugates, timber for packing and pallets – and unfortunately current forecasts mainly say that this pain will continue for months before it gets better, and there are few if any that seem to match my start-of-summer optimism.

In all these examples I have concentrated on price, and it’s such a key factor to business success that it deserves this attention, but beside that is the other edge that is availability, and in operational, customer-fulfilment terms, this is every bit as significant as pricing impact.

So, we learn not much new really, other than Covid really has been unique in the new ways it throws us curve balls, and again in hindsight it is worth reconsidering that unusual V profile of a steep decline followed by recovery. Demand has been surprisingly elastic in its behaviour, but for many varied reasons a supply scenario where we slam shut the valves for months and then try to open them as fast as we can doesn’t look like it can keep up. Logic says then that this is a delay, and so we should expect an improvement in these detriments, but I will leave forecasting the timeline of that to others.

The challenges thrown up by this situation and the associated strains in international logistics have sparked some interesting conversations about onshoring local capability and capacity to strengthen future supply, and another set of factors could add to those in ways that drive demand. The recent publishing of the IPCC climate change report made for sobering reading that would be difficult to avoid even if you were trying, and we are now only a few weeks away from the full focus of COP26 in our own backyard. In our discussions with companies around their own plans for a route map to achieving net zero, the need for accounting principles which add up both currency and carbon is prominent, and what better way to manage the carbon column than shortening supply chains for resilience and reduction.

Paul Sheerin is chief executive of Scottish Engineering