SCOTTISH manufactured exports fell by 2.2% during the third quarter of last year, as overseas sales by the electronics and drinks sectors plummeted, official figures have revealed.

This quarter-on-quarter drop in export volumes, which followed a rise of 3.3% in the three months to June, represents another significant blow to hopes of an economic recovery led by overseas trade.

Comparing the year to September with the preceding 12 months, manufactured exports were down 0.9%, according to the seasonally-adjusted data published yesterday by the Scottish Government.

Loading article content

Chancellor George Osborne, in his March 2011 Budget, spelled out his vision of "a Britain carried aloft by the march of the makers".

However, the recovery in the UK has been driven in large part by consumers who have for a long time now been enduring falling incomes in inflation-adjusted terms, amid freezes or paltry rises in pay.

Recovery in Scotland has, in broad terms, mirrored that in the UK as a whole.

The Scottish manufactured exports data showed a 6.7% quarter-on-quarter decline in overseas sales of the electrical and instrument engineering industry in the three months to September.

The Scottish Government said that such a downturn in electronics exports was "not out of line with the typical volatility of this sector".

The fall in electronics exports in the third quarter followed a modest rise in the three months to June.

Exports by the Scottish drinks sector, of which the Scotch whisky industry makes up a huge part, tumbled by 8.3% quarter-on-quarter in the three months to September.

Drinks sector exports fell in the second quarter, according to the Scottish Government figures, although much less sharply, having risen in the opening three months of last year.

A spokeswoman for the Scotch Whisky Association, when asked about the easing off in drinks exports in the three months to September, said it did not want to read too much into what happened quarter-on-quarter and tended instead to look at the longer-term figures.

She said that in a comparison of the year to September with the preceding 12 months, the value of Scotch whisky exports was actually up 4.74%, at £4.4 billion.

The spokeswoman added: "We are still feeling confident about the long-term trend, and the figures are bearing that out if you look at the figures for the 12 months to September last year."

The Scottish Government highlighted a 2.7% quarter-on-quarter drop in refined petroleum, chemical and pharmaceutical product exports in the three months to September as a factor that played a big part in the overall decline in overseas sales by the manufacturing sector.

Overall exports by the engineering and allied industries fell by 3% quarter-on-quarter in the three months to September, reflecting mainly the weak performance by the electronics sector.

Elsewhere in this category, mechanical engineering exports fell by 1.6% quarter-on-quarter.

In contrast, exports by the transport equipment sub-sector rose by 0.7%.

The rise in Scottish manufactured exports in the second quarter was revised down yesterday to 3.3%. It had, in the export figures published last October, previously been estimated at 3.5%.

Andy Hall, head of corporate banking for Barclays in Scotland, said of the latest manufacturing export figures: "Performance in the sector has been subdued in Q3, following the previous quarter's...rise, as Scottish manufacturers continue to operate in difficult economic circumstances."

He added: "While this would suggest that economic recovery is not fully embedded in Scotland, more recent measures (of activity)...signal an increasingly positive outlook for Q4 output."

Figures published last week by the Scottish Government showed that gross domestic product north of the Border grew by 0.7% in the third quarter. This was only slightly adrift of GDP growth of 0.8% in the UK as a whole in the three months to September.

Liz Cameron, chief executive of Scottish Chambers of Commerce, said: "These figures tally with the findings of the Scottish Chambers of Commerce quarterly business survey, which has shown falling export trends throughout 2013.

"However, we have also measured an increase in domestic orders from across Scotland and the rest of the UK during the same period, and this rise in domestic demand has more than compensated for the overall fall in exports."

She added: "While we would like to see more businesses looking towards overseas markets, we must recognise that the global economy remains patchy and therefore the breadth of exporting and targeting key growth markets will be extremely important in sustaining exports this year and next."