According to the latest annual data from the Make UK/Santander analysis the importance of a deal with the EU should not be under-estimated when it comes to manufacturing.
- Top six European markets account for a third of total manufacturing exports
- UK goods exported to the US jumped by 19% year-on-year
- UK retained position as 9th largest manufacturer and 10th for global exports
- Average pay in manufacturing – £34,538 – remains significantly higher than services and economy overall
- London and South East now the biggest manufacturing region
The critical importance of avoiding barriers to trade between the UK and the EU is highlighted today by new analysis which shows that manufacturing exports to the top six EU markets alone are worth around a third of total goods exports.
According to the research, ‘UK Manufacturing Facts, 2020/21, published by Make UK, the manufacturers’ organisation, and Santander UK, total global exports stood at £367 billion. While the US was the single largest importer of UK manufactured products, seven out of the top ten UK export markets are based in Europe, including Germany (2nd), France (3rd) and Ireland (4th). China, ranked fifth, was the only other top ten destination for UK goods outside of Europe and the US.
Exports to the top six European markets – Germany, France, Ireland, Netherlands, Switzerland and Belgium – were worth £117.4 billion alone. Just under half (46%) of all UK manufactured goods were exported to European countries combined, totalling £169 billion. The US was the single biggest export destination and saw a 19% increase on last year, equating to £54.4 billion.
The research also showed that the UK retained its position as the ninth leading manufacturer and tenth in terms of global exports with output(1) totalling £191 billion in 2019 – a growth of 7% over the last five years. The data also reveals that among the 2.7 million people employed by UK manufacturers, the average salary stands at £34,538 – 13% higher than the average UK salary.
According to the data, Transport Manufacturers were the largest exporters (22%); Food and Drink remained the leading sub-sector for output (17%) while Transport also generated the most in terms of R&D (36.4%). This spend on R&D highlights the critical importance of the automotive and aerospace sectors to the long-term high value growth of the economy, despite the major impact of the pandemic on these two sectors in particular.
The research reveals that while the North West remains the single biggest region in terms of output (£27.2 billion), London (£8.2 billion) and the South East (£22.5 billion) are growing in prominence, with the South East increasing output by almost 6% in the last five years. This is down to the heavy concentration of electronics, worth £4.7 billion alone in the South East, which was already benefiting from the drive towards digital technologies and automation, a trend which the pandemic is likely to have accelerated.
The data, captured before the Coronavirus outbreak shows that goods exports (53%) outweighed that of services (47%) while the sector continues to punch above its weight contributing 66% of total UK spend on R&D and 16% of business investment.
Commenting, Stephen Phipson, Chief Executive 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 UK, commented: “Our manufacturers have shown unyielding resilience over recent months. Retaining our position as the ninth leading manufacturer makes it clear that the UK is still a major player on the international stage, but we must not rest on our laurels. This data underlines the importance of prioritising manufacturing as the UK establishes new trading relationships with partners around the world.”