Swinney blames fall in exports on UK ‘austerity’

John Swinney reports that recovery in manufacturing remains fragile. Picture: Ian Rutherford

Official data released yesterday showed that whisky exports were hit particularly hard during the third quarter of 2013, while the engineering and petrochemicals sectors reversed the previous quarter’s gains.

Overseas sales remain well below their pre-recession peak, the figures show, although Swinney insisted Scotland’s economic health was improving.

Swinney, pictured below, added: “Over the last 12 months, manufacturing has seen growth, but the recovery remains fragile as a result of European trading conditions and Westminster’s continued pursuit of austerity.”

Yesterday’s figures, contained in the Scottish Index of Manufactured Exports, show overall export volumes fell 2.2 per cent during the three months to September, having grown by 3.3 per cent in the previous quarter.

The report noted that the recovery in exports has been “relatively uncertain” since the financial crisis, and quarterly growth rates have been volatile.

It added: “The results saw export volumes falling back to 10.1 per cent below their peak in the third quarter of 2008.”

Andy Hall, head of corporate banking at Barclays Scotland, said there were signs that the situation is improving, but manufacturers continued to face a difficult economic environment during the third quarter. He added: “While this would suggest that economic recovery is not fully embedded in Scotland, more recent measures such as GDP signal an increasingly positive outlook for fourth-quarter output.”

Exports of refined petroleum, chemicals and pharmaceutical products fell 2.7 per cent during the third quarter, having grown by 4.2 per cent in the previous three months.

However, the period covered by the data does not include the disruption at the Grangemouth petrochemical complex, which had been threatened with closure in October following a dispute over pay and conditions.

Overseas sales of food and drink shrank by 7.4 per cent, dragged down by a weaker-than-expected 8.3 per cent slide in drink exports.

Scottish Chambers of Commerce chief executive Liz Cameron said: “There are some important concerns over sectors which rely heavily on exports such as food and drink.

“Whilst we would like to see more businesses looking towards overseas markets, we must recognise that the global economy remains patchy and therefore breadth of exporting and targeting key growth markets will be extremely important.”

According to the Scotch Whisky Association, the value of exports rose 4.7 per cent to £4.4 billion in the 12 months to September, and a spokeswoman for the trade body said distillers remained confident about long-term prospects, thanks to strong demand in emerging markets such as South America.