Manufactured exports have dropped in the last quarter

They fell by 0.8% in the last quarter and have dropped by nearly 37% in real terms since a peak at the end of 2000.

The fall has been driven by a decline in the high tech electronic sector, which has plunged by 66% since 2000.

Although there was a decline over the quarter, the Scottish Executive figures showed sales of manufactured exports increased by 1.3% over the year.

The big quarterly fallers were the high tech sector, down 2.3%, chemicals, down 4.3%, and mechanical engineering, down 2.9%

I am encouraged to see an increase in manufactured exports over the year - the first annual increase we have witnessed for five years Deputy First Minister Nicol Stephen

The big increases were in metals, up 7.5%, textiles, fur and leather, up 5.3%, and drink, up 0.9%.

Over the year, mechanical engineering, metals, and drink were the sectors with the most growth, increasing by 16.6%, 20.8% and 2.9% respectively.

The yearly figures for high tech exports went down by 3.9%, food and tobacco decreased by 8.9%, and chemicals went down by 1.2%.

Deputy First Minister Nicol Stephen said: "I am encouraged to see an increase in manufactured exports over the year - the first annual increase we have witnessed for five years.

"Looking forward, overall conditions in the Scottish economy remain positive - the labour market continues to perform strongly, and all business surveys are in agreement that the Scottish economy is set for a positive performance over the remainder of 2006."

Crucial sector

But the Scottish National Party's enterprise spokesman Jim Mather MSP said the report marked the continued decline of the country's manufacturing.

He said: "Since the Labour led government came to power in 1999 manufacturing exports have fallen by a third.