Export dip 'highlights fragility of recovery'

The official figures, yesterday branded "disappointing" by business leaders, were tempered by news that foreign sales still showed modest annual growth.

The quarterly dip was driven by a decline in exports of metal products of more than 10 per cent.

Peter Hughes, chief executive of Scottish Engineering, said the market for metal-based exports was prone to fluctuations due to the unstable price of commodities and varying demand from China.

He said: "I don't think the figures are that bad. Annually, exports are up by 0.7 per cent, and there's still a fair degree of optimism in the manufacturing sector, especially big companies."

Hughes said even the engineering sector, the only area to show a decline over the year to September, had an underlying positive trend, but was still affected by a huge fall in electronics exports since 2000.

CBI Scotland's assistant director David Lonsdale also remained confident but called for funding to establish more direct air links with key overseas business destinations and hubs and better support for trade from the government.

He said: "The figures for the third quarter of last year are disappointing but will hopefully prove to be temporary, before the upward trend in export growth resumes. Indeed our own industry survey found growing optimism about export growth among Scots firms.

"However this does reinforce the need for our parliamentarians to put policies that promote trade and business investment at the heart of their agendas. This cannot be left solely to SDI and enterprise networks, wider devolved public policy must help."

Yesterday's data showed exports of metal products declined 10.3 per cent between July and September, while chemicals and petroleum declined by almost 3 per cent and wood and publishing exports dropped 2 per cent.

Growth of about 6 per cent was observed in textiles, fur and leather and by just under 1 per cent in food, drink and tobacco. "Other manufacturing" exports grew by 2.1 per cent.

The figures come in the wake of a visit by a high-profile delegation from China, during which a partnership was secured for investment at the Grangemouth oil refinery and a 6.4 million agreement was reached to introduce renewable energy technology pioneered in Scotland into China.

Scottish enterprise minister Jim Mather said: "It's been an exceptional week for Scotland on a global stage.

"But today's exports figures demonstrate the continued fragility of the recovery and highlight the difficulties faced by Scottish companies competing globally."