Scottish engineering is showing 'healthy growth' in the first two quarters of 2012 after a lean quarter at the end of 2011.
Latest figures from the Scottish Engineering Quarterly Review show an improvement in order intake, output volumes and staffing.
Dr Peter Hughes, chief executive of Scottish Engineering, the support group for the industry in Scotland, said he was "pleased" that engineering companies who have responded to the survey are painting a picture of optimism which he has seen in his visits to companies across the country.
"We have seen how the engineering manufacturing sector has once again come up with the goods," he said.
"It is reassuring to know that whilst our politicians fiddle, our engineering manufacturing sector is getting on with the job of winning business across world markets and in so doing is making a great contribution to our nation's wellbeing."
The report, in conjunction with M&C Energy, shows that the general total for order intake is positive, as it has been for eight of the last nine quarters.
Output volume, is maintaining the high levels that were prevalent throughout last year.
However while staffing levels within the industry remain high, many companies are reporting skills shortages, with CNC operators and welders being much in demand.
As staffing levels have risen, so the amount of overtime being worked has also gone up compared to previous quarters.
Both capital investment and training investment plans remain buoyant and Dr Hughes said the future appears brighter for the sector.
He added that prices in the UK were remaining firm whereas export prices are very slightly positive.
"I know that our expertise can help all sizes of company reduce energy costs, be energy efficient, and remain competitive in global markets, so we are delighted to see that the whole engineering manufacturing sector is still showing great success in terms of orders and output," said Mark Dickinson, CEO at M&C Energy Group.
"It is also heartening to see that staffing levels reflect this level of trading and that companies are continuing to train for the future."