Mixed export figures demonstrate the need to make Scotland more competitive, the Cabinet Secretary for Finance and Sustainable Growth John Swinney said today.

The Scottish Manufactured Exports Estimates report shows that Scottish manufactured export sales grew by 3 per cent over the 2007 calendar year, but decreased by 2 per cent in real terms in seasonally adjusted forth quarter figures.

Over the quarter, the main industry contributing to the decrease in manufactured export sales was drink which fell by 8.1 per cent over the latest quarter. All three subsectors within engineering also showed quarterly reductions in export sales, with electrical & instrument engineering (-2.2 per cent) and mechanical engineering (-8.7 per cent) contributing most to the overall fall in engineering exports of 3.6 per cent. Chemicals and refined petroleum grew by 12.4 per cent over the last quarter of 2007, and growth was also seen in other manufacturing (up 6.8 per cent), food and tobacco (up 3.2 per cent) and wood, paper, publishing and printing (up 2.1 per cent).

Over the year, engineering and drink were the main industries contributing to the annual growth, with annual growth of 3.5 per cent and 4.5 per cent respectively. Wood, paper, publishing and printing (up 23.8 per cent) and metals & metal products (up 11.1 per cent) also showed strong annual growth. The main industry showing a decline was chemicals, with an annual decline of 5.5 per cent. Electrical & instrument engineering ( down 1.1 per cent), food and tobacco (down 11.8 per cent) and textiles, fur and leather (down 1.7 per cent) also fell over the year.

Swinney said: “These statistics show a mixed picture of growth through 2007 – but a dip in the final quarter.

“Although short term trends like this are always likely to be volatile, the decrease in exports may point to the downturn in global economic conditions which began to take effect in the latter half of 2007.

“No country can isolate itself from the prevailing global economic conditions. But what we can do is act to make Scotland more competitive – which is exactly what this government is doing.

“Business rates have now been cut for thousands of small businesses across Scotland and the reforms to our Enterprise Networks will mean more streamlined and focused support for businesses.

“And through the Government Economic Strategy, our whole public sector is now focused on creating the right conditions for increasing sustainable economic growth.”

He added: “What we don't need at a time of global economic uncertainty is taxation which hinders any of our key industries. A dip in drinks industry exports – which returned to levels closer to trend after recent fluctuations - is one reason why the figures are down for the final quarter of 2007.”

“That makes the Chancellor's decision to impose punitive tax rises on the whisky industry in particular even more frustrating. It gives licence to international competitors to raise tariffs on Scotch whisky at a time when crucial industries such as this need our support.”

Commenting on the data, CBI Scotland's director Iain McMillan said: "The dip in fortunes in the final quarter highlights the fragility of the recovery in Scotland's export performance that has been witnessed over the last couple of years. Hopefully it will prove to be merely a temporary blip, before growth resumes. CBI Scotland's industrial trends survey is published later this month, and we will be watching closely to see how firms' export performance, order books, and optimism fared during the first quarter of 2008.

He added: "It is vital that government and policy makers keep a firm lid on the costs under their control and influence, and the reduction in business rates on indigenous firms is welcome recognition of this."

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