Firms blame uncertainty as...
Dramatic slump in number of Scottish exporters
Firms are focusing on the UK market
The number of firms exporting from Scotland has shown a dramatic slump despite the favourable exchange rate and support from government agencies.
Less than a third of firms (29%) now export, compared to 37% last summer, according to the latest Business in Britain report from Bank of Scotland.
This compares to a UK figure of 40%, down four percentage points on six months ago.
Volatile currency rates were the biggest factor affecting firms’ decisions to trade overseas, with 26% saying the biggest barrier to exporting is exchange rate uncertainty. Tariffs and quotas were cited by 10%.
The figures will confound those who expected the low value of sterling to boost overseas trade as it makes British products cheaper to overseas buyers.
A net balance of 17% of all businesses across Scotland said the fall in the value of the pound is bad for the economy, while 20% said it was bad for their business.
The Business in Britain report, now in its 26th year, gathers the views of more than 1,500 UK companies, including 125 in Scotland, and tracks a range of performance and confidence measures.
However, it found that, among those that are already trading overseas, exporters in Scotland are buoyant about their 2018 trade prospects with a net balance of 17% expecting overseas sales to increase over the next six months.
This is on the back of a strong end to 2017 in which a net balance of 19% said their international trade had increased in the second half of the year.
A quarter (25%) of Scotland’s exporters have decided to focus more on UK sales in light of Brexit, though most are optimistic about what lies ahead.
Simon Quin, an SME specialist at Bank of Scotland, said: “The majority of Scotland’s exporters still see international trade playing an important role in their plans, despite the continued climate of domestic and international uncertainty.”
The US remains the number one export destination, followed by Brazil, China, France, Germany, Ireland and Norway.
China is regarded as offering the biggest opportunity for international trade.
Mr Quin added: “Trading overseas can feel intimidating, but with Scottish food and drink in particular enjoying an enviable reputation across the word, and the fact that the fall in the value of the pound makes a lot of British exports more attractive overseas, it’s clear there are opportunities for Scottish exporters to prosper globally with the right support.”