British manufacturers have helped drive a recent boost in exports by adopting increasingly sophisticated strategies, new research shows.
December saw one of the sharpest drops ever recorded in the UK’s trade deficit, down to £1bn from £3.6bn the month before, helping to boost the manufacturing sector by 0.3 per cent, according to the regular purchasing managers’ index from Markit Economics.
This was partly due to recent signs of economic recovery in the Eurozone – the UK’s largest export market – but a report released today by the manufacturers organisation EEF found emerging markets now make up half of priority targets for manufacturing firms.
The Tracking the Export Journey report, produced in collaboration with Barclays, also found that companies were increasingly developing strategies to target emerging markets rather than reacting to potential opportunities
Brazil has become a top priority market, the report said, with one third of companies surveyed planning to increase exports there and a further two thirds were planning to increase business with Asia.
‘If the sector is to be at the forefront of an export-led recovery, it appears manufacturers are up to the challenge,’ said Barclays head of manufacturing Mike Rigby in a statement.
‘They not only realise the benefits of exporting to markets nearer home but also, of taking their goods further afield to faster growing emerging market economies where the export sales potential is far greater.’
However, the report also highlights that while government support is highly rated by companies that make use of it, there is a continued lack of awareness of the breadth of expertise and help available.
EEF called on the government to step up efforts to market its services. ‘If we are to double our exports by 2020 then we simply have to get more and more companies exporting, helped by a government led crusade highlighting the benefits of UKTI,’ said EEF chief economist Lee Hopley.
The report found developed economies remained the top destination for UK goods, led by the US and Eurozone. However China has moved from being the UK’s 11th largest market in 2007 to seventh in 2013, with Russia and India (12th and 14th respectively) likely to enter the top ten in the next few years.