Scottish exporters fall at double the UK rate

The number of Scottish businesses exporting has fallen to less than a third, a new survey has found.

The latest Business in Britain report from Bank of Scotland shows the number of Scottish firms exporting has dropped to 29%, down eight percentage points from 37% in June 2017.

Across the UK the number of firms exporting dropped four percentage points in the same period to 40%.

Just under a quarter of Scottish companies (24%) said they have taken a strategic decision not export, a marginal 2% decrease in the past six months from 26% in June 2017.

A quarter of firms (25%) said they had decided to focus more on UK trade in light of Brexit.

Exchange rate uncertainty was the biggest factor in deciding whether or not to trade overseas with 26% of firms citing this as the largest barrier to exporting, followed tariffs and quotas at 10% and costs - including transport and port entry taxes - seen as the biggest barrier by 7%.

The report collated responses from 1,516 UK firms, including 125 in Scotland.

Despite the drop in exporting, Scottish firms already trading overseas are positive about their 2018 trade prospects with a net balance of 17% expecting overseas sales to increase over the next six months.

A net balance of 19% said their international trade had increased in the second half of the year.

The country exports in Scotland believe offers the biggest opportunity for international trade is China for 25%, the US for 22% and Germany for 8%.

The US is the current most popular partner for Scottish exporters at 17% of trade, with Brazil, China, France, Germany, Ireland and Norway all on 8%.

Simon Quin, Scotland area director for Global Transaction Banking, SME 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.

“Judging from Scottish firms' export performances over the previous six months, this confidence is not misplaced and by using internal trade as a growth strategy for their business British firms can also manage risk during periods of uncertainty.

“The fact that Scottish exporters see China as offering the biggest opportunity in future shows that they are looking to preemptively tackle the impact of a potential loss of access to the EU single market.'