SCOTTISH exports plunged sharply lower during the first quarter of this year as the strong pound and the economic crisis in Asia finally began to take their toll, writes Robert Powell.
Until the end of last year, overseas sales had proved remarkably resilient.
Scotland achieved record exports of more than #20bn in 1997 as the mighty electronics and whisky industries managed to ship more goods at the cost of slimmer profit margins.
But the latest quarterly survey of Scottish manufacturing exports by Scottish Council Development and Industry (SCDI) shows the dam has finally burst.
Shipments during the first three months of this year slumped by more than #1000m to #4800m from #5870m in the final quarter of 1997.
There is always a seasonal decline in shipments during the first quarter following a rush of pre-Christmas computer and whisky sales in the preceding three-month period.
Together whisky and electronics account for two-thirds of Scottish exports.
But this year the first-quarter decline in exports was much more marked than usual - Scotland shipped #210m less than the #5060m achieved in the same period of 1997.
More ominously perhaps, this dismal performance was accompanied by forecasts of a further decline in the value of shipments during the second quarter, when exports usually start to recover.
SCDI head of policy and information Bob Ballantine said: ''These figures are obviously disappointing, but they are consistent with reports we have been receiving for a considerable time from exporters that the strong pound in particular and more recently the Asia-Pacific crisis, are having a very adverse effect on companies' ability to export.
''Until there is some downward movement in the value of the pound, it is difficult to see the situation improving in the short to medium term.''
That easing of the pound may well have started to take place. The pound slid below 2.90 German marks at the end of last week for the first time in six months after peaking at 3.09 marks at the end of March - a decline of 6%.
Expectations of a further rise in UK interest rates are waning fast and steady progress towards the creation of a single European currency makes sterling less attractive as a safe haven than it was before the political deal struck in Brussels earlier this month.
The overwhelming majority of Scottish exports are funneled into the EU countries whose currencies are strongly linked to the mark, so this easing of the exchange rate, if sustained, should soon start to benefit local firms.
The SCDI data shows that during the first quarter, the decline in Scottish exports was spread evenly across all the top sectors.
Electronics, food and drink and chemicals all suffered, but surprisingly perhaps, textiles shipments picked up.
The think-tank's quarterly surveys reflect the performance and expectations of 26 leading companies that together account for half of Scotland's total exports.
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