by Tony Goodman MBE
In the week when we learned that UK exports had risen to a record £647 billion it seems opportune to look at where those exports are going to. With an overall growth of 4% for goods and services, goods alone showed an increase of 4.7% to an annual £357 billion or 55% of the total. This marks a run of 38 consecutive months of export growth on an annual rolling basis. The level of exports as a percentage of GDP still falls woefully behind our European neighbours, but the UK Government have set a target in the recently released Export Policy to increase exports as a percentage of GDP from 29% to 35%, which will still be a long way short of the European average.
The largest market for UK goods is the USA with 14%, followed by Germany 11%, France 8% and Netherlands and Ireland 6% each with China on 5%. However, in services, the USA represents 22.7%, Germany only 6.7%, Netherlands 6.2%, France 6.1%, Ireland 6%. So overall the USA is by far the UK’s largest export market with an overall export share of 18.4% against Germany 9.1%, France 7% and Netherlands and Ireland
just 6% each. So, with exports to the USA being more than twice as much as the next country, and the UK having an overall trade surplus with the USA, but a substantial trade deficit with Germany and all the EU, it is clear to see why there has been so much focus on a potential post Brexit trade deal with the USA.
So what is it that we export?
In goods our percentage exports are: Cars 9.5%, Mechanical Power Generators 7.1%, Medicinal and Pharmaceutical products 7.1%, Crude Oil 5.5%, Aircraft 4.3%, Refined Oil 4.0%, Metals 2.7%, Scientific Instruments 2.6% and many more. In Services: Professional, Management Consulting, Technical and Trade Related Services 29%, Financial Services 21.1%, Travel 13.7% and Transport 10.7%.
What does all this mean?
The UK economy is performing best where there is no single market or free trade agreement to level the playing field. UK high calibre products and services are in demand across the world and if the latent power of the economy and UK companies can be unleashed to accelerate growth in exports as the Government want, then lack of free trade agreements will not be a barrier to that growth. I have been involved in the exporting of Chemicals, Food, Software and Services for 30 years, and tariff regimes have never been an issue. Quality, reliability and price always are the main focus of discussions. In recent years I have been involved in exporting food products to more than 50 countries; whilst there were often tariffs involved, these were never a restriction on being able to do business, they were just part of the cost in the same way that transportation is. Exporting is simply selling to people who happen not to be in the same country as you. Perhaps because we are an Island nation, we see this as a big issue, but it shouldn’t be. The UK is a major trading nation, even without fulfilling its potential. In 2017 there were 235,800 exporters in the UK, a fraction of the overall number of businesses. Many of these exporters are very small businesses, giving lie to the claim that you need scale to be able to export.
You don’t. You just need to try.
In July more than 30 Northern Powerhouse Export Champions and regional representatives of the DIT gathered in the Lake District for a meeting on board one of Windermere Lake Cruises boats. The 30 active exporters included the Cruise company themselves. Regardless of the fact that the boats don’t ever leave the Lakes, they still fly the flag across the world and attract significant numbers of visitors from overseas. Anyone can export, even without ever leaving home!
Tony Goodman MBE is a successful exporter and has been doing so through a variety of different businesses. He has an MBA and is a Fellow of the Chartered Institute of Marketing, Member of the Institute of Exports, Member of the Institute of Directors and DIT Export Champion. Tony is currently Marketing Advisor at Forest and Co who specialise in offering guidance on branding, exporting and sales: www.forestandco.com