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Manufacturers continue to struggle

13:25, Oct 24 2012

 

Scotland's manufacturing sector is facing "an ongoing challenge" in the wake of disappointing new figures, business leaders have said.

Manufactured exports in the second quarter of the year are 4% down on the first three months.

Food and drink contributed most to the decline, with exports down 5.4% from the first quarter, the figures by Scotland's Chief Statistician show.

Drink exports fell 5.8% compared with the first three months of the year.

Exports from the engineering sector and its allied industries dropped 4.1% and exports of textile, clothing and leather were down 5.3%. But overall manufacturing exports were up 1.7% over the year to July.

The figures were published as business organisation CBI Scotland said its latest industrial trends survey shows that total new orders fell sharply over the last three months, with domestic orders declining for the sixth quarter in a row. When looking at the volume of new orders, the October survey shows there were 36% more firms where this was down than firms where it had risen.

For domestic orders from within the UK, there were 37% more firms reporting a decrease than firms where this had increased. A total of 67% of the firms surveyed are working below full capacity.

CBI Scotland director Iain McMillan said: "These disappointing results show that manufacturing industry in Scotland faces an ongoing challenge from both the weak outlook for economic growth in the UK and continued uncertainty in the eurozone and internationally. Whilst optimism has turned positive and increased since July, the dramatic decrease in total new and domestic orders is worrying."

Finance Secretary John Swinney highlighted the year-on-year growth in manufactured exports.

He said: "We have seen annual growth in industry sectors such as food and drink, chemical and petroleum products and textiles. However, this is offset by an overall quarterly fall in exports. This should be seen in the light of global economic conditions. During quarter two there was heightened uncertainty in some of our key export markets such as the EU as well as slowed growth in the US and Asia."

 

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