The importance of
the UK agreeing a deal with the EU which avoids barriers to trade is laid bare
today by new analysis which shows the value of trade with the bloc is worth
more than twice that of the United States, with seven of the UK’s top export
destinations being within the EU.
According to ‘UK Manufacturing: 2019/20 The Facts’, the
annual analysis of the sector published by Make UK, the manufacturers’
organisation and Santander, whilst the United States is the single biggest
export market for UK manufactured goods and services, worth £118.2bn (1),
exports to the top seven EU markets alone amounted to £236.5bn in the same
period (£256.1bn including Switzerland).
Broken down by
sector the export picture of manufactured goods is dominated by Transport
(25.5%) and Pharmaceuticals & Chemicals (17.9%) which highlight the
importance of these high value added sectors to the success of UK industry
overall, the aerospace and automotive sectors in particular.
The importance of
the top two dominant exporting sectors is also reflected in contributions to
business R&D where pharmaceuticals and chemicals and the transport sector
accounted for almost 70% of the total spend between them.
The transport sector
also led the way in export growth increasing by 7.4%, largely on the back of
continued growth in aerospace, closely followed by food and drink which
increased exports by 5.3%.
The analysis by Make
UK and Santander shows that manufacturing remains central to the success of the
economy overall, accounting for two thirds of overall R&D, 45% of exports,
15% of business investment and 2.7m high value jobs which are better paid than
the economic average. With annual output of £192 billion the UK remains the
ninth largest manufacturing nation in the world.
The analysis smashes
the myth that manufacturing jobs are badly paid with the average salary in
manufacturing of £33,592, compared to £29,832 for the whole economy and way
above services at £29,014.
By sector size, Food
and Drink remains the single biggest sector contributing 15.1% of GVA worth
roughly £73.1 billion, closely followed by transport (14.9% worth £72.1bn) and
pharmaceuticals and chemicals (14.2% worth £68.7bn).
By Region the North
West is the biggest single by output, worth £28.5bn, closely followed by London
and the South East worth £28.1bn.
Commenting, Seamus
Nevin, Chief Economist at Make UK, said: “These figures lay bare the
overwhelming importance for manufacturers of trade with our closest market and
the need to avoid imposing any barriers which will make this more difficult.
“Whilst the United
States remains the biggest market and, presents significant opportunities for
export growth, it is a fallacy to believe that geography is not the biggest
factor driving trade. For UK manufacturers access to their biggest market must
be a premium.
“The figures also
provide an important reminder that we’re still one of the top ten biggest
manufacturing nations and we want to see policy makers working with industry to
help move UK manufacturing up the rankings.”
Paul Brooks, UK Head
of Manufacturing, Santander, commented: “The UK has always punched well above
its weight when it comes to exports and it’s vital this trend continues – jobs
across the UK count on it.
“While we are
helping businesses build strong trade links with partners around the world, the
message from manufacturers is clear: Europe must remain a strong trade ally.
We’ll continue to support the UK to hold its position as a major global economy
and exporter.”
