Exports from UK manufacturers will be worth approximately £176bn to the economy this year, according to a new study from Barclays Corporate Banking.
Barclays’ The Export Dividend shows that despite supply chain disruption and challenges brought on by COVID-19 and Brexit, 69 per cent of manufacturing firms with 10 or more employees are exporting. Of these, British food and drink producers are reaping the highest financial rewards, with £34.3bn in sales globally, followed by automotive manufacturers with £20.9bn.
Over a quarter (26 per cent) of exporters said they had seen ‘significant growth’ in 2021, but only 18 per cent of non-exporters said the same. Manufacturers who export are also more confident about their prospects in 2022 with 88 per cent of exporting businesses upbeat about their growth prospects, compared to 71 per cent of those who do not.
Among those who do not yet export, there is said to be significant demand to start doing so with 63 per cent aiming to start exporting in 2022. If they do, Barclays’ economic modelling predicts it could be worth an additional £1.8bn to the economy next year, and an additional £14bn per year by 2030.
Non-exporters are more likely to favour European markets, with 30 per cent saying they would target Germany initially, followed by The Netherlands (24 per cent) and the US (24 per cent). In contrast, the US is the market that most current exporters (30 per cent) sell to, followed by Germany (26 per cent) and France (26 per cent).
The report highlights knowledge gaps in businesses with only 40 per cent of respondents aware of current or emerging initiatives to encourage international trade, such as the UK’s bid to join the Trans-Pacific Partnership (42 per cent) and free trade agreements with Japan (41 per cent) and Australia (39 per cent).
Fewer (35 per cent) were aware of the plans to create eight new freeports in England, which offer tax breaks for manufacturers on the import of materials. However, those familiar with freeports were very positive about the scheme with 78 per cent saying they plan to make use of them once they are running.
“The British manufacturing sector, like many others, has endured a tough year and around a third of our research respondents have been impacted by higher labour costs, higher material costs and other supply chain issues,” said Richard Craven, manufacturing industry director, Barclays Corporate Banking. “However, exporters, more than most, have weathered the storms and are enjoying strong demand for their products in markets all around the world. Confidence is high and many firms are looking to exports to fulfil their growth ambitions next year and beyond.”
Barclays Corporate Banking commissioned Censuswide to run a survey of 604 senior managers or above in manufacturing businesses with 10 or more employees, and conducted the study between 11th October and 20th October 2021.