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   Web Issue 3320 December 2 2008   
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Engineering helps exports to hold steady
MARK WILLIAMSONOctober 02 2008

Scottish manufactured exports held steady in the second quarter, helped by a very strong performance by engineering and allied industries, despite growing signs that the global economy was flagging.

However, while the latest official figures may boost hopes that exporters are in good shape they indicate that life became much harder between April and June compared to the first quarter.

The latest analysis prepared by the Scottish Government shows that total exports remained static in real terms in the three months to June, when it became increasingly apparent that key markets such as the US and Europe were entering a downturn.

Stripping out the effect of price changes, sales fell by just 0.1% over the year in the quarter to June compared with the four quarters to June 2007. As this covered the period immediately before the credit crunch, when the global economy was still doing well, the figures are encouraging.

In the latest quarter, the key engineering and allied industries grew exports by 1.4%, helped by boom times in markets such as oil and gas and mining. The sector accounted for 49.4% of all exports in 2007.

The latest increase took the index reading for engineering and allied industries to 115.1. This is the second highest reading recorded in the last five years, behind 126.8 in the second quarter of 2007.

Within the engineering sector, exports of transport equipment jumped 21.3%, while mechanical engineering rose by 6.3%. Exports by firms in the electrical and instrument engineering sub-sector fell by 3.2%.

Other manufacturing exports rose by 8.7%, while overseas sales of metals and metal products increased by 1.6%. Exports of firms in the wood, pulp, paper, publishing and printing sector rose by 5.4% in the quarter. However, the food, drink and tobacco sector, which accounted for 25.3% of exports in 2007, recorded a 2.5% fall in sales in the latest quarter. Exports of food and tobacco rose by 9.6%, but sales of drink fell 3.6%.

Exports of chemicals, coke, refined petroleum products and nuclear fuel fell by 5.2%. Exports of textiles, fur and leather fell by 6.6%.

Jim Mather, Enterprise Minister, said the figures showed Scottish manufactured exports were maintaining a solid performance at a turbulent time for economies worldwide.

Liz Cameron, chief executive of Scottish Chambers of Commerce, said: "Clearly some manufacturing sectors have performed better than others, whilst many firms market their products exclusively to the domestic market. However, these figures are important as a symbol of the strength and resilience of the Scottish economy overall."

However, the numbers suggest that life has been getting harder for exporters. In the first quarter exports leapt by 2.3% compared to the previous three months, following falls in the third and fourth quarters of 2007.

In the first three months of this year, exports by engineering and allied industries jumped by 7.8% on the previous quarter.

Comparing the year to June 2008 with the four quarters to June 2007, exports by firms in engineering and allied industries fell by 1.3%. Exports of chemicals, coke, refined petroleum products and nuclear fuel fell by 7.3%. Sales of textiles fur and leather slipped by 6.1% and other products by 1.3%.

Exports of food drink and tobacco rose by 1.9%, while metal and metal products exports increased by 12.9%. Wood, pulp, paper, publishing and printing sales jumped by 13.9%.

Iain McMillan, director of CBI Scotland, said: "These latest figures are consistent with our own industrial survey which found that Scotland's export performance had stabilised, after a period of sustained growth."

The index is based on a sample of around 1000 companies per quarter.


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