The Scottish engineering sector is in good health, but industry leaders fear a one-size-fits-all immigration policy following Brexit could hinder companies’ ability to recruit the specialists they will need to continue growing, a new report has warned.

Scottish engineering companies achieved faster output over the past three months, but the pace of order growth and export business slowed, according to a survey by the industry body Scottish Engineering.

Its report said that, while companies continue to recruit, the pace of hiring has slowed slightly, prompted partly by fears that the personnel needs of the industry are already being undermined by Britain’s intention to leave the European Union.

In response to a finding that 18% of engineering companies reported an increase in staffing, compared with a net 22% for the previous quarter, the body said: “We need to press the UK Government to look again at the content of their immigration policy proposal to take into account the differing needs of Scotland within the UK.

“The last thing our manufacturing industry needs is wider pressure across labour supply as a whole, whether that be for skilled engineering and technician roles, or just as importantly the operator group where we enjoy significant levels of EU nationals in our workplaces.”

Faced with a possible shortage of skilled workers, almost half of Scottish engineering firms are adopting a ‘grow-your-own’ policy with plans to boost their number of apprenticeships they offer.

Some 47% said they aimed to increase across all three types of apprenticeship – Modern, Foundation and Graduate – over the next five years.

The Modern Apprenticeship programme will see the highest growth in the next 12 months, with more than 43% of companies indicating plans for increased uptake, while Foundation and Graduate schemes will grow by 16% and 21% respectively.

The survey also showed 27% of Scottish engineering companies reporting an increase in output volumes in the latest quarter, faster than the pace of output growth for the previous three months, which stood at a net 22%.

Meanwhile, a net of 11% reported a rise on orders compared with the previous reporting period, when a net 20% posted a rise. A net 5% of companies reported growth in exports, lower than the balance of 9% over the preceding three months.