Pound woes fail to give exports lasting boost

THE latest monthly survey of the economy north of the Border, from Bank of Scotland, is something of a mixed bag.

It is good to see that the pace of growth of Scotland’s private sector economy accelerated in October, although it should be emphasised the expansion rate remained relatively modest. Both the manufacturing and services sectors showed faster growth last month than in September.

However, there were also several negatives in the survey.

In particular, it was somewhat disheartening to see Scottish manufacturers record a second consecutive monthly fall in new export orders. This indicates that sterling’s post-Brexit vote woes, which should make companies in Scotland and elsewhere in the UK more competitive in overseas markets, are not having a lasting positive effect on exports.

And the Scottish manufacturing sector’s overall new orders also fell for a second straight month in October. This would appear to reflect the overall weakness of the UK economy.

Manufacturers meanwhile continue to be hit hard by the other consequence of sterling weakness – rising import costs. The survey shows cost pressures remain intense, with the impact of the pound’s woes on raw material prices highlighted by manufacturers.

And, looking ahead, optimism among Scottish companies about growth prospects over the next 12 months has eased.

This is hardly surprising, given the state of the UK economy and the continuing post-Brexit vote shambles at Westminster. But it is nevertheless lamentable.