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As results season swept across the sector, the familiar macro themes of commodity cost hikes, higher energy costs and dollar weakness echoed throughout this challenged sector.

Among the big boys, rising steel costs hurt Tomkins to the tune of £18 million last year, and heat treatment specialist Bodycote International lamented the effect of the rising oil price on its energy costs. Nevertheless, chief executive John Hubbard still managed to announce a 74 per cent jump in operating profits to £43.6 million on a modest sales increase in 2004, despite the masking effect of the dollar.

Elsewhere, FTSE 100 engineer Smiths impressed with a jump in interim profits from £105 million to £125 million, buoyed by an upturn in commercial aerospace. The company also showed its confidence with a first rise in the half-time pay out since 2001.

Amid the small caps, Birmingham engineer Metalrax reported higher sales and profits for 2004 thanks to a stronger second half — profits crept up from £12 million to £12.1 million on turnover of £104.5 million (£104.3 million). But boss Richard Arbuthnot said the engineer had reorganised in a 'never-endingly' tough market, and had to maximise efficiencies in the face of 'shocking' hikes in the cost of steel, energy and plastic.