Export Insights provides a short guide to the key trends in UK exporting. Boosting trade is central to better-balanced growth across our economy. Market diversity can also deliver greater resilience for firms looking to expand and grow. More UK manufacturing companies are now selling to overseas markets than is the case across the rest of the economy, so the sector will continue to play a substantial role in driving ahead with the exports our economy needs to grow and to enable us to pay our way in the world.
Exporting vital signs
The UK is heavily dependent on exporting to help grow and rebalance the economy. Manufacturing is central to this objective as the sector accounts for around half of total UK exports and because manufacturers have seen a stronger rebound in exports since the end of the recession compared with companies exporting services.
Following the severe recession, in which global trade flows weakened sharply, most manufacturing sectors have seen a strong recovery in export sales. In 2011 exports from metals and motor vehicles were 31% and 27% higher compared with 2009.
At the beginning of 2012, almost half of manufacturers surveyed by EEF said that demand from emerging markets in particular would be a key source of growth for their business. As the eurozone has lurched from crisis to crisis, confidence amongst UK companies about the order outlook has been eroded. Indicators of activity across Europe show that the sovereign debt crisis has clearly spilled over into the real economy; official statistics in the UK show that sales to EU markets have gone into reverse since the end of last year.
However, sales to non-EU markets continue to grow, and in May 2012 exports to markets outside Europe overtook those to EU countries. While there would be repercussions across all parts of the world from another escalation in the eurozone crisis, for the moment short-term growth prospects are better, and they remain an important source of growth for UK exporters.
Developed economies are, and will continue to be, important markets for UK companies. A majority of manufacturers surveyed by EEF members last year expected to see some growth in sales to Europe and North America in the coming 12 months and in the next five years. However, the shift towards non-EU markets has been under way for some time, with emerging markets dominating the top ten growth markets since 2005. The BRIC economies (Brazil, Russia, India and China) all feature, with growth rates over the period ranging from 83% in India to a trebling of export sales to China.
This article is taken from EEF’s ‘Export Insights’ October 2012 publication