Make UK analysis shows Europe still dominant market for British goods
The annual analysis of the UK manufacturing sector published by Make UK and Santander highlights its importance to the future success of Great Britain’s economy.
According to ‘UK Manufacturing: 2019/20 The Facts’, while the United States is the single biggest export market for UK manufactured goods and services, worth £118.2bn, exports to the top seven EU markets alone amounted to £236.5bn in the same period (£256.1bn including Switzerland).
Broken down by sector the export picture of manufactured goods is dominated by transport (25.5%) and pharmaceuticals and chemicals (17.9%). They highlight the importance of these high value-added sectors to the success of UK industry overall, particularly in aerospace and automotive.
The importance of transport and pharmaceuticals and chemicals is also reflected in contributions to business R&D where they accounted for almost 70% of the total spend between them. The transport sector also led the way in export growth increasing by 7.4%, largely on the back of aerospace, closely followed by food and drink which increased exports by 5.3%.
The UK is the world’s 10th largest exporter and 7th largest for trade; it remains among the top ten manufacturing nations in ninth place. UK manufacturing’s annual output is worth £192bn to the economy overall.
The analysis by Make UK and Santander shows that manufacturing remains central to the success of the economy overall, accounting for two thirds of overall R&D, 45% of exports, 15% of business investment and 2.7m high value jobs which are better paid than the economic average.
The analysis challenges the myth that manufacturing jobs are badly paid with the average salary of £33,592, compared to £29,832 for the whole economy and significantly above services at £29,014.
By sector size, Food and Drink remains the single biggest contributor to GVA with 15.1%, worth roughly £73.1 billion, closely followed by transport (14.9% worth £72.1bn) and pharmaceuticals and chemicals (14.2% worth £68.7bn).
Seamus Nevin, Chief Economist at Make UK, commented:“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 at Santander, added: “The UK has always punched well above its weight when it comes to exports and it’s vital this trend continues – jobs across the UK count on it.
“While we are helping businesses build strong trade links with partners around the world, the message from manufacturers is clear: Europe must remain a strong trade ally. We’ll continue to support the UK to hold its position as a major global economy and exporter.”