The Scottish Government export growth strategy ‘A Trading Nation‘ has the headline goal of increasing the value of international exports from the equivalent of 20% of Scottish GDP to 25% by 2028, but since the strategy was launched in 2019 there has been considerable disruption to international trade through political changes such as the UK’s exit from the EU, the impact of the Covid-19 pandemic and geopolitical events such as the Russian invasion of Ukraine.
The Scottish Government produces ‘Export Statistics Scotland’, which along with Regional Trade Statistics from HMRC allow us to evaluate how Scottish exporters have negotiated these challenges.
This blog is a summary of a more detailed briefing SPICe have produced, and shows 10 key charts which give an overview of recent export performance.
Export Statistics Scotland figures show that in 2021 the value of exports was £80 billion, which is a fall of £2.2 billion (2.6%) compared to 2019. The fall in the value of exports since 2019 was not uniform; exports to the EU reduced by £2 billion (-11.7%), to the rest of the world by £2.1 billion (-11.2%), but exports to the rest of the UK (rUK) grew by £1.9 billion (4%). As noted above, the Scottish Government’s aim is to grow Scotland’s exports to the equivalent of 25% of GDP. In the 2019 trade strategy, the Scottish Government stated that:
“When considering exports as a % of GDP and against the performance of our international competitors, however, Scotland’s performance is not so encouraging”
Figure 1 below shows the value of Scottish international exports of goods and services. compared with Scotland’s onshore GDP since 2001. This shows the value of Scotland’s exports compared to GDP has, since 2001, always been below this 25% target, and has fallen since 2002. Since the launch of the Trading Nation strategy, the value of exports compared to GDP grew to 21% in 2019, but has fallen to 18.6% by 2021 as the value of exports grew more slowly than the size of the economy.
Consistent with recent history, the rest of the UK (rUK) remains the main destination for exports from Scotland. Service exports also make up nearly half of all Scottish exports, as shown in Figure 2 below.
Export Statistics Scotland is not the only source of data on Scotland’s exports: HMRC also produce Regional Trade Statistics (RTS). RTS only cover international goods exports, but are more regular, more timely and have a longer period of consistent data for making comparisons. Figure 3 below sets out Scotland’s international goods exports by destination since 2016/17. Our briefing looks in more detail at the RTS data, including setting out the differences compared to Export Statistics Scotland.
Again using the more recent RTS data, Figure 4 below shows a more detailed sectoral breakdown of Scotland’s goods international exports for 2023/24, highlighting the proportion of exports going to the EU and elsewhere. ‘Mineral fuels, lubricants & related materials’ (£9.1 billion). ‘machinery and transport equipment’ (£8.3 billion) and ‘beverages and tobacco’ (£5.2 billion) are the most significant sectors of Scotland’s goods exports by value in 2023-24.
Figure 4 shows that there has been considerable volatility in the value of goods exports from Scotland in recent years. However, Figure 5 below shows that excluding oil and gas exports, Scotland’s goods exports appear to have been far more stable between 2016/17 and 2023/24.
Within the oil and gas exports, one of the more significant changes in this period is oil and gas exports to China, which increased significantly in value in 2019/20 but then almost entirely stop. Figure 6 shows this reduction in oil and has exports to China, and we look at oil and gas exports in more detail in a case study in the briefing.
Since trade sanctions were announced against Russia, there has been media coverage of the increase in exports to Russia’s neighbours. Using the RTS data, we can see this trend in Scotland’s crude oil and refined products exports, which is shown in Figure 7 below.
Figure 8 below shows that gas exports to Ireland have also increased significantly in recent years, but have fallen back from the peak in 2022/23. Ireland has typically sourced around 40 to 50% of its gas from Great Britain through undersea pipeline connections, but Ervia note that this has been over 90% in some years.
Seafood exports have not declined markedly following the UK’s exit from the EU in aggregate, but there has been a considerable switch in terms of the markets and products being exported. In addition, as highlighted by the Constitution, Europe, External Affairs and Culture Committee, there has been a significant increase in the non-tariff barriers Scottish food and drinks businesses face to export their goods to the EU. France is now the destination for nearly three quarters of all Scotland’s seafood exports to the EU as shown in Figure 9 below, an increase from just over half in 2019/20. We look at Scotland’s seafood exports in more detail in a case study in the briefing.
Scotland’s exports of beverages have accounted for a significant proportion of all Scotland’s exports for a number of years, and the new trading arrangements with the EU do not appear to have had a significant impact. Figure 10 below show food and drink exports by destination between 2016/17 and 2023/24.
As mentioned earlier, SPICe have produced a more detailed briefing which sets out further details on the main data sources on Scotland’s exports, the Scottish Government’s policy in this area, and recent geopolitical events which have impacted international trade.
Andrew Aiton, Andrew Feeney-Seale and Iain McIver, SPICe Research