SCOTLAND’S trade deficit in the third quarter of 2016 was up by £111 million on the same period a year earlier, at £3.001 billion, the latest national accounts show.
It was narrower than the £3.16bn deficit on trade with other parts of the UK and the rest of the world in the second quarter of last year.
But economist John McLaren, honorary professor at the University of Glasgow’s Adam Smith Business School, forecast that Scotland remained “in line for a deficit of around £12bn” for 2016 as a whole.
He noted this would be a record level, exceeding the £10.8bn trade deficit for 2007. The 2015 trade deficit was around £10.1bn. These trade figures exclude the North Sea.
The widening of Scotland’s trade deficit, comparing the third quarter of last year with the same period of 2015, arose because “imports” from other parts of the UK and the rest of the world increased by a greater amount than exports.
The Scottish Government figures show the value of exports to other parts of the UK and the rest of the world in the third quarter of last year was up by £1.087bn on the same period of 2015. Imports showed a £1.198bn year-on-year increase in the third quarter.
Exports to other parts of the UK and to the rest of the world in the third quarter of last year were up by 7.2 per cent and 4.2 per cent respectively on the same period of 2015. Imports from other parts of the UK and the rest of the world were up by four per cent and 8.8 per cent year-on-year, respectively, in the third quarter of 2016.
Comparing the second and third quarters, Mr McLaren said it was “difficult to discern” any impact of the sterling exchange rate depreciation in the wake of the Brexit vote on Scotland’s trade figures.
Mr McLaren, who runs the Scottish Trends website, added: “The Scottish trade balance for 2016, while improving a little in Q3, is still likely to worsen…from 2015 and to a record level.”
The national accounts also show Scottish manufactured export volumes fell by 3.8 per cent between the second and third quarters of last year.
Comparing the year to September 30 with the preceding 12 months, manufactured export volumes were down by 5.3 per cent.
Household spending is estimated to have risen by 1.9 per cent quarter-on-quarter during the three months to September. And it was up by 4.4 per cent on the third quarter of 2015, according to the national accounts.
Mr McLaren noted that, including offshore activity, Scottish gross domestic product grew by 0.9 per cent quarter-on-quarter in cash terms during the three months to September.
However, he noted that it was 1.4 per cent below its level in the third quarter of 2014, in contrast to growth of 6.1 per cent seen at a UK-wide level on this basis.
He added: "Scottish GDP remains below the level seen two years ago, in contrast to the growth of over six per cent seen at the UK level.
"Much of this poorer performance can be attributed to the slowdown in North Sea activity."
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