THE Scottish manufacturing sector suffered a sharp drop in export sales and orders in the fourth quarter of last year, in contrast to an acceleration of growth of their domestic business, a survey has revealed.
The survey, published today by British Chambers of Commerce, underlines the challenges facing Scottish exporters amid economic troubles in the eurozone and elevated geopolitical tensions.
Subtracting the ¬proportion of firms reporting a rise from that experiencing a fall, while adjusting the findings to give larger companies a greater weighting, British Chambers' survey shows respective balances of 23 per cent and 12 per cent of Scottish manufacturers posted drops in export sales and orders in the fourth quarter.
In the third quarter, respective weighted balances of 15 per cent and 20 per cent of Scottish manufacturers had achieved rises in export sales and orders.
Garry Clark, head of policy and research at Scottish Chambers of Commerce, said: "I think it is fair to say that, since the high point [in] the second quarter of last year, we have seen a wee bit of easing across the board in many areas. Exporting is still an area of concern. "
Mr Clark highlighted the eurozone's move into deflationary territory in December, which was revealed with the publication of official figures yesterday.
Consumer prices in the eurozone in December were down by 0.2 per cent on the same month of 2013, the first time there has been a year-on-year fall since October 2009.
Mr Clark said: "I think we are looking to Europe with a bit of concern. It remains a key export market."
On a more positive note, respective weighted balances of 29 per cent and 25 per cent of Scottish manufacturers reported that domestic sales and orders grew in the fourth quarter. This was a significant improvement on corresponding weighted balances of nine per cent and 11 per cent in the previous quarterly survey.
However, while the latest survey showed modest growth in Scottish manufacturing employment in the fourth quarter, firms in the sector are signalling an overall fall in the workforce in the opening three months of this year.
The survey showed a sharp acceleration in domestic sales growth for Scottish services companies in the fourth quarter.
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