Scottish Engineering's latest quarterly review suggested an improvement in orders and output on the previous two three-month periods.
It also found "particularly strong" growth in staffing levels.
The industry body said it showed engineering firms were "gritting their teeth" in tough economic conditions.
According to the survey of 320 companies, positive output figures were reported by electronics firms, fabricators, machine shops and mechanical equipment businesses.
UK orders in general were similar to the first quarter of this year, while export orders also remained positive.
Employee numbers generally showed a "marked improvement " across small, medium and large companies over the previous quarter.
In general terms, levels of optimism among small and medium sized firms remained positive, but there was a more negative outlook from large companies.
Scottish Engineering said some sections of the engineering industry were looking to improve on the last quarter's predictions.
Fabricators indicated high hopes for UK orders in the next quarter, although some saw exports declining compared with the last quarter.
Scotland's engineering and manufacturing sector has recorded a third strong quarter in a row, an industry survey has found.