Scotland could export £20 billion of goods by 2017

Scotland could be exporting £20 billion worth of goods by 2017 as a new report forecasts the country will see sales to overseas countries increase at a higher rate than both the UK and the European average.

It is thought that the drinks industry would play a large part in the rise in exports. Picture: Getty

The EY UK Export Goods Monitor says strong performances from the engineering and aerospace sectors, as well as the drinks industry, will help goods exports jump from £18.2 billion last year to £20.1 billion.

The same report said the country could benefit economically from next year’s Glasgow Commonwealth Games, but this will hinge on showcasing key industries, creating new relationships and developing business opportunities.

The study by EY - which was known as Ernst & Young - predicts Scottish exports will experience annual growth of 2% a year - higher than the 0.3% growth forecast for the UK and the average for Europe, which is predicted to be 1% a year.

Of all the regions in the UK, Scotland is forecast to have the fifth highest growth for export goods, according to the report.

Growth

While it predicts some sectors - including oil and gas - will see goods exports fall over the period 2012 to 2017, it forecasts strong performances from the aerospace, engineering and chemicals industries will push overall exports up.

Drinks exports, including from the Scotch whisky industry, are forecast to grow from £4.4 billion to £4.5 billion over the five-year period.

Finance Secretary John Swinney said the report revealed a “projected export performance by Scottish companies that will outstrip the rest of the UK in the next five years”.

He added: “Growth sectors such as chemicals, engineering, beverage and aerospace are essential if Scotland is to move on to a more sustainable, balanced path of growth and economic success.

“Scotland’s drinks industry is also performing strongly, with whisky exports set to rise to £4.5 billion by 2017.”

The research predicts that the US, France, Germany and the Netherlands will continue to be the leading buyers of Scottish products, with exports to the US - Scotland’s leading destination for goods - forecast to grow by 3.9% to £3.7 billion by 2017.

Recovery

Despite that, goods exports to France and the Netherlands are forecast to drop by 12.6% and 11.1% respectively.

Jim Bishop, Scotland senior partner at EY, warned exporters must not rely on their tradition western European trading partners and should try to move into new markets.

He said: “Any increase in exports must be taken as a positive, but Scotland’s goods exporters must move away from a reliance on western trading partners and tap into rapid growth trade corridors where there great demand for what we do best.

“Harnessing that appetite will help underpin the recovery of our largely services-based economy.”

He added: “The whisky industry has grasped the thistle and is benefitting from rapid overseas growth, but other sectors and companies are to be encouraged to follow its lead.

“Scotland’s reputation for manufacturing excellence shines through in the engineering figures while it’s encouraging to note the predicted increase in chemical exports.”

Crucial

He also said there was a “feeling that the chemical industry could become a crucial contributor to Scotland’s economic performance, more so even than now”.

On the potential the 2014 Commonwealth Games has for exports, Mr Bishop said: “It’s stunning to consider that the Commonwealth makes up 30% of the world.

“That incorporates a couple of billion people in some of the fastest-growing economies where Scotland is exporting.”

Mr Swinney said: “This report recognises the huge economic opportunities that the 2014 Games offers Scotland.

“Scottish companies have already won approximately 75% of the Games’ contracts let by the Organising Committee and this Government is determined to build on that, through the delivery of a business legacy programme, delivered by Scottish Enterprise and VisitScotland working collaboratively with Scottish business.

“Competing in the global economy is challenging but the Scottish Government and our enterprise agencies will continue to help encourage more growth companies to become active exporters.

“With the full fiscal and economic powers of independence the Scottish Government could do yet more to strengthen our economy and create jobs.”