Exports wilt as concerns grow over conditions abroad, warns CBI Scotland
The sustained growth in the volume of Scottish manufacturing export orders over recent years is expected to come to a halt over the coming quarter, due to mounting concerns over economic and political conditions abroad
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. It comes as firms' report that concerns over political and economic conditions overseas have risen, and which are now at their fifth highest quarterly level in 10 years.
The figures are contained in the latest CBI Scotland Industrial Trends Survey, published today. The quarterly survey includes sectors such as: textiles; chemicals; food and drink; metals and metals manufacturing; mechanical, instrument, electrical and vehicle engineering.
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.
Numbers employed turned negative during the three months, and is expected to remain subdued during the next quarter.
Scottish industry reported another rise in average unit costs, albeit less strong than in the previous two quarters, but were not able to pass this on in the form of higher domestic prices. The average price of oil was $104.96 per barrel during this latest survey period, compared to $113.73 previously.
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.
Iain McMillan, Director of CBI Scotland, commented:
"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.
"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 re-balancing 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."