The export dividend: Extending the global reach of UK manufacturing
The post-pandemic economic picture in the UK is one of contrasts. On one hand, supply chain pressures, rising wage and energy costs and labour shortages; on the other, faster business growth and a recovery of GDP, which had climbed back to a fraction under pre-pandemic levels by September. Our research reveals manufacturers are experiencing both extremes.
Momentum is growing among manufacturers to ramp up exports
As the government unveils its ambitious new export strategy, exporting is already central to UK manufacturing’s growth efforts – with significant numbers poised to export for the first time.
Our Research and modelling shows:
- In 2021 manufacturing exports will have brought in more than £176bn to the UK economy, with the food and drink sector accounting for 19% of this value and the automotive sector 12%
- Despite grappling with supply chain disruption and other challenges, manufacturers have enjoyed a successful 2021, with 26% achieving more growth than in a normal pre-pandemic year. Exporters (29%) were more likely to achieve significant growth than non-exporters (18%)
- Confidence for 2022 is high, with 88% of exporting businesses and 71% of non-exporters upbeat about growth next year
- This positive mood prevails despite 71% of manufacturers reporting that pandemic-related disruption is still having an impact, particularly around the supply chain. Manufacturers are also facing rising costs of labour and materials
- The same proportion, 71%, are experiencing some adverse effects from Brexit. For exporters, time delays and extra paperwork are the issues most commonly reported
- 69% of manufacturers with ten or more employees are exporting, earning on average half of their income from overseas trade. Of those not currently exporting, 63% are making plans to do so over the next year
- While challenges may persist, manufacturers are finding innovative ways around these; if they follow through on their export ambitions, their efforts could boost the economy by an extra £14bn by the end of the decade
- The US and European countries remain key markets, but Canada, India and Latin America also feature highly for both current and potential exporters.
In 2021 manufacturing exports will have brought in more than £176bn to the UK economy.
Head of Manufacturing, Transport and Logistics, Barclays Corporate
Strategies for success
Map it out
If you’ve never done so, set aside time to brainstorm the potential overseas appetite for your products. Map out the demographics of likely markets, the competition, and the skills and capacity you’d need to get started.
Tap in to expertise
Barclays publishes a range of thought leadership material to share industry knowledge and insights and has a team of specialist industry and trade directors. Talk to specialist Government and Industry organisations (e.g. DIT, Make UK, Institute of Export) who may be able to provide financial support, seminars and workshops alongside local knowledge and useful contacts in your target markets, as well as information about trade show opportunities.
Seek out funding
Barclays offers a range of solutions to fund the exporters’ working capital cycle, and to help protect against the risks associated with selling overseas. In addition, Barclays works with UKEF to provide Government backed facilities, supporting the drive to ensure that no viable UK export should fail for lack of finance or insurance. For example, the recently launched UKEF General Export Facility (GEF).
Get the detail right
Thoroughly research the regulatory environment, business culture and transport infrastructure of your chosen market. Factor in local taxes and payment terms. Ensure you have the admin covered, from customs registration to labelling requirements.