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5 April 2006

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SCOTTISH MANUFACTURIED EXPORTS FOR THE FOURTH QUARTER OF 2005

A Scottish Executive National Statistics Publication

Scottish manufactured export sales grew by 1.9 per cent in real terms in 2005 Q4 but decreased by 1.8 per cent over the year to 2005 Q4, according to estimates published today by the Scottish Executive.

The main findings are:

· Scottish manufactured export sales grew by 1.9 per cent in real terms in 2005 Q4 but decreased by 1.8 per cent over the year to 2005 Q4.

· Over the quarter, the main industry driving the growth in export sales was chemicals with a quarterly increase of 7.8 per cent, followed by electrical & instrument engineering (+2.5%) and transport equipment (+8.0%). The industries showing a decline in exports sales in real terms were drink (-5.9%), textiles, fur and leather (-4.3%) and food and tobacco (-1.8%). All other industries grew over the quarter.

· Over the year, electrical & instrument engineering (E&IE) was the main industry contributing to the decline in export sales with an annual fall of 11.5 per cent. Also contributing to the annual decline, but to a lesser extent, were chemicals (-4.7%), food and tobacco (-3.9%) and textiles, fur and leather (-3.9%). The main industry showing growth in export sales in real terms over the year was drink, with an annual rise of 7.1 per cent. All other industries grew over the year.

· Excluding the electrical and instrument engineering industry, manufactured exports rose by 1.6 per cent in 2005 Q4 and increased by 3.5 per cent over the year to 2005 Q4.

· Since the exports peak in 2000 Q4, the level of manufactured export sales has fallen by 36.0 per cent in real terms. This represents a average quarterly decline of 2.2 per cent.

· The main industry driving the growth in export sales over the period 1995 to 2000 was electrical & instrument engineering, rising from 81.0 to 161.9 points (+99.8%). This industry is also the main driver of the decline in the level of exports since the peak in 2000, falling to 58.8 points between 2000 and 2005 (-63.7%).

· The level of decline in manufactured exports has reduced over recent years. Since 2002 Q4, the level of manufactured exports has fallen by 12.9 per cent in real terms. This represents an average quarterly decline of 1.1 per cent.

· Electrical and instrument engineering contributed 58.3% to total manufactured exports estimates in 2000, (the peak of manufactured exports). In 2005, this industry only contributed 32.1% to total manufactured exports.

BACKGROUND NOTES

Methodology

1. Estimates of Scottish manufactured exports are compiled on the standard industrial classification UKSIC(2003). Implemented on 1 January 2003, UKSIC(2003) is a minor revision to UKSIC(92), in line with the latest revision of the European Union classification system.

2. The estimates are derived from data on sales of goods produced by the Scottish manufacturing industry for export outwith the UK. The Office for National Statistics (ONS) collect the data used to produce these figures in their Monthly Production Inquiry. Export estimates for the refined petroleum products industry are calculated using a volume series supplied by the Department of Trade and Industry and export ratios estimated using the Scottish Executive's Global Connections Survey.

3. The main purpose of the Index is to identify volume changes over time. Accordingly, data are deflated to 2000 prices using UK export producer price indices, which are produced by the ONS. These constant (2000) price estimates provide a more appropriate measure for monitoring change over time as they have had the effect of price changes removed.

4. Deflated exports sales of the companies covered by the Inquiry are grossed up to represent the entire population of each industry using the Inter Departmental Business Register.

5. Cross-referencing company information from the Global Connections Survey (GCS) is carried out annually to enhance the level of consistency between individual company records held in both sources. GCS annual data is currently only available for calendar years 2002 -2004, so rescaling of pre-2002 data takes place to ensure continuity.

6. The data have been seasonally adjusted where appropriate. The Scottish Executive has developed systems to seasonally adjust the series in line with standard National Statistics practice.

7. In total, the Index is based on a sample of around 1,000 Scottish manufacturing companies per quarter. This sample covers all sizes of unit across the manufacturing sector.

The Global Connections Survey

8. The Global Connections Survey (GCS) provides an annual cash estimate - in current prices - of the value of exports sales for the economy as a whole; the only survey to do so. The Quarterly Index of Manufactured Exports provides a time series of growth in export sales, at constant prices, for the manufacturing industry. The annual estimate of total exports from Scotland derived from the Global Connections Survey indicates that the manufacturing sector accounted for £12 billion - 70 per cent of all exports from Scotland in 2004.

9. Further information about the methodology of the Index of Manufactured Exports and the Global Connections Survey can be found on the website at www.scotland.gov.uk/exports

Volatility

10. Some of the indices for smaller industries can be particularly volatile when examined on a quarterly basis. In some cases this is due to the nature of the industry (e.g. transport equipment), in others it can be due to the relatively small size of the industry in export terms (e.g. food & tobacco). For these reasons, care should be taken when drawing any firm conclusions from individual quarter results. Estimates of annual changes will be more robust than quarterly changes.

Revisions

11. It is the Scottish Executive's policy to use all the data available at the time of publication to ensure that the best possible estimates are provided. This inevitably leads to revisions to previously published estimates. All quarters affected by data revisions are be updated at the earliest possible opportunity. This allows those using the data for long-term analysis to have a long-term consistent series. We have a commitment to continually improve the quality of the index of manufactured exports, and part of this commitment involves an ongoing programme to develop the data sources and methodologies used in the compilation of the series.

12. Tables 3 and 4 provide detailed information of revisions at industry level. Quarterly revisions which balance out to zero over the year indicate that there has been a change to the seasonal pattern of the series rather than a revision to the data for any companies.

13. The revisions seen this quarter within the other manufacturing series are due to the industrial reclassification of a single large company. Other revisions this quarter are fairly minor and are due to revisions to company data and/or changes in the seasonal pattern in certain industries.

National Statistics

14. National Statistics are produced to high professional standards set out in the National Statistics Code of Practice. They undergo regular quality assurance reviews to ensure that they meet customer needs. They are produced free from any political interference.

Mercury and Profile users may obtain a copy of the Index tables by telephoning the number below or via the website www.scotland.gov.uk/exports

List of Tables

Table 1: Quarterly Index of Manufactured Exports, in Constant Prices, by Industry

Table 2: Quarterly Index of Manufactured Exports, in Constant Prices, Detailed Industries

Table 3: Revisions to Data Published on 11 January 2006 (Table 1)

Table 4: Revisions to Data Published on 11 January 2006 (Table 2)

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