Scotland's international exports increase while sales to the rest of UK fall

Image source, Reuters
Image caption,
The Scotch Whisky industry enjoyed strong sales last year

Scotland's international exports increased while sales to the rest of the UK dropped, according to the latest statistics.

The figures showed total international exports excluding oil and gas increased by £460m to £29.8bn in 2016.

This was driven by sales to non-EU countries - with EU exports falling by £105m to £12.7bn.

There was a big drop in sales by Scottish onshore businesses to the rest of the UK, down by £4.4bn to £45.8bn.

But exports to non-EU countries increased by £565m to £17.1bn in 2016, largely driven by an increase in service exports, including financial services, as well as strong food and drink sales.

The manufacture of food and beverages continues to be the largest industry for international exports in Scotland, with sales increasing by £275m to £5.5bn.

This was largely due to strong whisky exports, which were worth £4bn in 2016

Scotland's total exports excluding oil and gas were estimated at £75.6bn, down £3.9bn from the previous year.

Exports to the rest of the UK accounted for 61% of this total, with EU exports accounting for 17% and non-EU exports 23%.

Image source, Scottish govenment

The biggest driver for the drop in sales to the rest of the UK was the decrease in exports of utilities - which fell by nearly a quarter (£1.6bn) - and in particular exports of electricity.

The Scottish government said this was partly due to the closure of Longannet power station - but Scotland remained a net exporter of electricity in 2016.

Sectors involved in providing support services to the oil and gas industry also saw large decreases in their exports to the rest of the UK.

Exports of professional, scientific and technical activities decreased by £745m (16.2%) and exports of mining and quarrying, which includes mining support services, decreased by £355m (10.4%).

The largest sector for exports to the rest of the UK continued to be financial and insurance activities, with exports worth £7.8bn in 2016 - down slightly from the previous year.

Image source, Richard West/Geograph
Image caption,
The Scottish government said the closure of Longannet had impacted on Scotland's electricity exports to the rest of the UK

The US continues to be Scotland's top international export destination country, with sales worth £4.8bn.

The top five international export markets - the US, Netherlands, France, Germany and Norway - accounted for £12.1bn (41%) of international exports from Scotland.

What has the political reaction been?

The Scottish government's economy secretary, Keith Brown, said the figures covered a year of "considerable uncertainty" with the EU referendum, the downturn in the oil and gas sector and the closure of Longannet.

Mr Brown said all of these factors had impacted on the figures, and warned of the risk of "severe damage" to the economy if the UK government continues with its plan to leave the European single market and the customs union.

But he said it was encouraging that international exports were continuing to increase, with the food and drink sector performing particularly well.

The UK government's Scottish secretary, David Mundell, said the figures showed that Scotland's trade with the rest of the UK was still worth nearly four times that with the EU.

He added: "We know that more than half a million Scottish jobs depend on the vital UK internal market. As the UK prepares to leave the EU, it is essential that we ensure the UK internal market continues unimpeded.

"The trade figures also show an increase of over half a billion pounds in exports to markets outside the EU. This demonstrates the opportunities that lie ahead for Scottish businesses, as we strike new, ambitious trade deals around the world."