A NEW study has predicted Scotland will enjoy significantly stronger growth in goods exports than the UK as a whole in the five years to 2017, as its engineering, chemicals and aerospace sectors hike overseas sales.
Accountancy firm Ernst & Young's UK Goods Export Monitor, published today, projects that Scotland will enjoy a jump in goods exports from £18.2 billion in 2012 to £20.1bn in 2017 in real terms.
It calculates that this rise equates to a compound annual growth rate of 2% - well ahead of a corresponding CAGR of 0.3% for the UK as a whole over the five years to 2017.
The projection for annualised growth in goods exports for Scotland is also ahead of an average of 1% for European nations.
Scottish Finance Secretary John Swinney welcomed the findings of the Ernst & Young report, highlighting the projection that Scotland would outperform the UK as a whole in terms of growth in goods exports.
Scotland is ranked fifth out of 12 UK nations and regions in terms of projected goods export growth between 2012 and 2017, with the West Midlands and East Midlands respectively taking first and second place, the south-west of England in third spot, and the Yorkshire and Humberside region in fourth position.
Ernst & Young meanwhile highlighted the opportunity for Scotland to use next year's Commonwealth Games to boost future exports, declaring: "Brand Scotland could reach up to 1.5 billion people - but it (economic benefit) will hinge on showcasing key industries, creating new relationships and developing business opportunities."
Jim Bishop, Ernst & Young's senior partner for Scotland, said: "It's stunning to consider that the Commonwealth makes up 30% of the world. That incorporates a couple of billion people in some of the fastest-growing economies where Scotland is exporting."
The Export Monitor, compiled for Ernst & Young by researcher and forecaster Delta Economics and based on data covering 200 countries worldwide, projects that Scotland's engineering sector will enjoy compound annual growth in goods exports of 5.4% over the five years to 2017. Scotland's chemicals and aerospace sectors are projected to enjoy compound annual goods export growth rates of 3.4% and 11.9% respectively between 2012 and 2017.
Beverage exports, driven by Scotch whisky, are projected to rise to £4.5bn by 2017, from £4.4bn in 2012.
Within the engineering sector, Scotland's exports of industrial and power-generating machinery are projected to rise.
Mr Bishop said: "The whisky industry has grasped the thistle and is benefiting from rapid overseas growth, but other sectors and companies are to be encouraged to follow its lead. Scotland's reputation for manufacturing excellence shines through in the engineering figures, while it's encouraging to note the predicted increase in chemical exports."
He added: "There is a feeling that the chemical industry could become a crucial contributor to Scotland's economic performance, more so even than now. That was recently highlighted by the approval of Falkirk Council's Tax Incremental Financing (TIF) scheme by the Scottish Government where the chemical sciences sector is expected to play a key role in the region's regeneration and development."
The Ernst & Young study projects that the US, France, Germany, the Netherlands and Norway will remain the leading buyers of Scottish goods by value in 2017. Nevertheless, it forecasts that Scottish goods exports to France and the Netherlands will fall sharply between 2012 and 2017.
The study forecasts that Scottish goods exports to the US, the biggest overseas market in this context, will grow at a compound annual rate of 3.9%, to £3.7bn by 2017. And it projects 4.7% compound annual growth of goods exports to Germany, to £1.3bn.
Meanwhile, the Ernst & Young report predicts rapid compound annual growth in Scottish goods exports to Venezuela, Latvia, and Australia, of 19.1%, 17.8%, and 16% respectively over the five years to 2017. These are relatively small markets at the moment for Scottish goods exports.
Mr Bishop said: "Any increase in exports must be taken as a positive, but Scotland's goods exporters must move away from a reliance on Western trading partners and tap into rapid growth trade corridors where there is great demand for what we do best. Harnessing that appetite will help underpin the recovery of our largely services-based economy."
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