Warning that growth in Scottish export orders to end

CBI Scotland said that worries over problems in the Eurozone were having an impact on business.

It called on the Scottish Government to do more to galvanise growth north of the border.

Following seven consecutive quarters of growth, export orders are expected to contract in the coming three months, and at their fastest pace for four and a half years, according to the latest CBI Scotland Industrial Trends survey.

New domestic orders in the three months to October remained negative for a second successive quarter, with expectations for the next three months the poorest since April 2009.

Firms report that concerns over political and economic conditions overseas have risen and are now at their fifth highest quarterly level in 10 years.

CBI Scotland director Iain McMillan said: “This is an undoubtedly disappointing set of survey results.

“Worries over the problems in the Eurozone, the sustainability of sovereign debts more widely and the political will to deal with them have grown, making conditions for our manufacturing exporters more challenging.”

The report also found that the numbers employed dropped during the three-month period.

Scottish industry reported another rise in average unit costs, though less strong than in the previous two quarters, but were not able to pass this on in the form of higher domestic prices.

Confidence over the general business situation and over export prospects for the year ahead remain “becalmed”, with the latter at its weakest since July 2009.

Mr McMillan called on the Scottish Government to take action.

He said: “While our exporters have more headwinds to battle against, we do think there are things that government here can do to help.

“That is why we continue to argue that the Scottish Government’s spending plans should be improved in order to better galvanise growth.

“A far bolder approach to making savings is required in order to release monies for further investment in infrastructure and support for exporters.

“Similarly, the decision to block extra runway capacity at Heathrow and Gatwick has raised questions over the UK Government’s commitment and strategy for helping Scottish firms export and expand abroad.

“If we are to see a rebalancing of our economy towards investment and exports, then it is important that firms are able to access London’s key interlining airports in order to target key overseas markets or service foreign-based customers.”

The October 2011 CBI Industrial Trends Survey was conducted between September 26 and October 12. A total of 31 Scottish manufacturing firms replied.