SCOTLAND'S embattled manufacturing sector was dealt a further blow yesterday as official economic data revealed that Scottish export sales had fallen for the third successive quarter.
But the gloomy Scottish Government data was counteracted by a more upbeat report in the latest UK PMI survey from the Chartered Institute of Purchasing & Supply (Cips).
It revealed the slowest fall in activity in more than a year.
However, th
e picture north of the Border was less positive, with manufactured export sales falling 3.4 per cent in the first quarter of 2009 compared to the final three months of last year.
According to new figures from the Scottish Government, the drop was an improvement on the 9.6 per cent slump seen in the previous three months.
But the sales figures for the quarter were 6.5 per cent lower than the same period in 2008.
The worst falls came in Scotland's textiles, fur and leather industries, which slipped 12.7 per cent, while wood and paper also slumped – by 7 per cent.
The only rise came in the food, drink and tobacco industries, which saw exports grow by 5.2 per cent.
Finance secretary John Swinney said the figures showed the impact of the global downturn on exports.
Swinney commented: "With our key export markets suffering, the obvious result is a weakening in demand for Scottish products.
"But the decline in Scottish exports, while disappointing, mirrors global trends and has eased somewhat since the last statistics were published in April."
Liz Cameron, chief executive of the Scottish Chambers of Commerce, added: "This reduction in the rate of decline is welcome, but it is still too early to confidently make predictions as to whether the corner has been turned."
But the Scottish figures came as the CIPS report showed that UK manufacturing output rose for the first time in 15 months in June.
The benchmark purchasing managers index rose to 47 last month from 45.4 in May – the highest since May 2008 – and beating analysts' forecasts.
Although the index is still below the no-change mark of 50, it is a significant improvement on February's low – when it posted a reading of 34.7.
Experts said the upbeat report indicated that firms were adapting to market changes – with many expanding their promotional activities and discounting goods in a bid to generate sales – but warned that it did not signal a full recovery in the sector.
Employment declined for the 15th successive month in June, while new orders and stocks of finished products continued their decline.
David Noble, chief executive at Cips, said: "That such data can be read so positively really highlights how bad things have been over the past 15 months. Employment levels are still falling which demonstrates that we still have a long way to go before the sector returns to full health."
Howard Archer, chief UK economist at IHS Global Insight, added: "While leaner stocks and a more competitive pound have improved their position, manufacturers are still battling against muted domestic demand, difficult conditions in overseas markets and intensified competition."
The full article contains 520 words and appears in The Scotsman newspaper.
