Scottish exports up 3% last year despite final-quarter slump

MANUFACTURING export sales from Scotland dropped towards the end of last year, according to new figures from the Scottish Government.

But export sales grew by 3 per cent over the whole of last year, despite sales slipping from the third quarter to the fourth quarter by 2 per cent.

The drinks sector experienced one of the worst decreases, down 8.1 per cent in the fourth quarter compared with the third, prompting finance secretary John Swinney to once more attack UK Treasury plans for a whisky tax hike.

Business leaders said the figures demonstrated the "fragility" of Scotland’s export market and called for politicians to reduce costs for businesses.

CBI Scotland’s director, Iain McMillan, said: "The dip in fortunes in the final quarter highlights the fragility of the recovery in Scotland’s export performance that has been witnessed over the last couple of years. Hopefully it will prove to be merely a temporary blip, before growth resumes."

He added: "It is vital that government and policymakers keep a firm lid on the costs under their control and influence, and the reduction in business rates on indigenous firms is welcome recognition of this."

CBI Scotland’s own industrial trends survey is to be published later this month.

Swinney said he believed the dip could be related to the global credit crunch.

He said: "Although shortterm trends like this are always likely to be volatile, the decrease in exports may point to the downturn in global economic conditions which began to take effect in the latter half of 2007."

Swinney added that the cut in business rates and streamlined enterprise networks would mean more support for businesses. He added: "No country can isolate itself from the prevailing global economic conditions. But what we can do is act to make Scotland more competitive – which is exactly what this government is doing."

The mechanical engineering sector suffered a big drop over the quarter, down 8.7 per cent – contributing to an overall fall of 3.6 per cent in engineering exports. Over the year, however, engineering and drink were the main industries contributing to the 3 per cent growth in manufactured export sales, racking up fullyear growth of 3.5 per cent and 4.5 per cent respectively.

Liz Cameron, chief executive of Scottish Chambers of Commerce, called on the UK government to cut fuel duty. Cameron said: "This is the second consecutive quarter in which our manufactured exports have fallen, and should act as a wakeup call for the governments."