'Funk' blamed for exports slump

The food and drink sector saw the most dramatic decline

Scotland's exports fell by 2.8% over the last year and by almost 10% in the last quarter of 2008, according to the latest statistics.

Enterprise Minister Jim Mather said the government was full square behind Scottish businesses and was working hard to help them through the downturn.

He added: "The scale of the economic challenge we face is clear."

The Confederation of British Industry (CBI) said overseas markets were "in a funk at the moment".

The Scottish manufactured exports estimates for the fourth quarter of 2008 were published by Scotland's chief statistician.

'Truly global'

The figures suggested a decline in exports across all industries during the three-month period.

The greatest declines were a 20% fall in food, drink and tobacco and a 10.5% drop in metals and metal products.

There were also falls of 5.6% in engineering and allied industries; 7% in chemicals, coke, refined petroleum and nuclear fuel; 3.8% in textiles, fur and leather; 2.6% in wood, paper, publishing and printing; and 2.7% in other manufacturing.

Mr Mather said the current downturn was "truly global".

"With many of Scotland's key export markets in recession, it is clear our exports will fall as a result," he said.

It is crucial that government continues to resist protectionism David Lonsdale CBI Scotland

"That mirrors the collapse in exports worldwide in quarter four of 2008, with Japan falling by 16%, Germany by 20%, the Euro Zone by 21% and the UK by 24% over this period."

CBI Scotland's assistant director, David Lonsdale, said: "Key overseas markets are in a funk at the moment, so the weaker pound has yet to provide the anticipated fillip to Scots-based export-oriented manufacturers.

"However, if sterling remains becalmed then that scenario could well change over the coming months with exporters starting to feel the benefit in enhanced competitiveness."

He added that international trade was likely to play a larger role in driving forward Scotland's economy in the years ahead.

"It is crucial that government continues to resist protectionism and does everything it can to encourage firms to seek out and win new business overseas.

"The recent expansion of the support on offer to Scots exporters from agencies such as Scottish Development International is something we called for and greatly welcome."

'Internationalisation'

Liz Cameron, Chief Executive of Scottish Chambers of Commerce, said: "The sharp drop in our manufactured exports at the end of last year is disappointing though not unexpected, given the global nature of the economic downturn.

"Scotland's high propensity to export was one of the factors which helped insulate us from the worst of the effects of the downturn in the early 1990s, but it is clear that against a more widespread international picture of low business and consumer demand, things are more challenging for Scottish businesses this time around.

"Broadening the internationalisation of our firms remains a key objective as we look forward to the economic recovery ahead, and the Scottish Government have done well to boost the reach of the Scottish Manufacturing Advisory Service as we look to build towards this goal."

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