Exporters hit by dollar dive

FIRST signs that the dollar's slide is hitting British industry emerged today with news that exports to the US tumbled by nearly 10% in November.

Official figures showed manufacturers shipped £2.27bn of goods to the US, against £2.5bn in October. The fall, coinciding with the start of the dollar's slide on foreign exchanges, dragged Britain's trade in goods surplus with the US down to a five-month low of £417m.

That sparked concern that sterling's surge against the dollar is making manufacturers less competitive and forcing them to cut prices.

The US is Britain's biggest export market, with more than 15% of overseas business done there, and prolonged dollar-weakness could threaten industry's fragile recovery. Sterling today hit a new 11-year high $1.8391.

Economist Simon Rubinsohn at broker Gerrard said: ?If we continue to see sterling advance like this, there is no doubt it will put additional pressures on manufacturing.

?I think we are going to hear more and more tales of companies having difficulties growing profits in North American markets because they are having to cut their prices.‘

He added that the blow should be softened by a US economic upswing and cheaper dollar-denominated raw materials.

Overall, Britain's global trade in goods deficit widened from £4.2bn in October to £4.4bn in November, mainly due to a fall in oil exports because of maintenance shutdowns on North Sea fields.