UK manufacturing exports will bring in around £176bn to the domestic economy, according to new research from financial giant Barclays Corporate Banking (Barclays).
Overseas trading has remained resilient despite challenging economic conditions caused by the pandemic and Brexit, including widespread supply chain issues and energy shortages.
Barclays’ report – The Export Divided – even suggests total exports could soar to £190bn by 2030, if manufacturers that are currently planning to enter the market begin selling their products overseas.
The bank commissioned Censuswide to run a survey of 604 senior managers in manufacturing businesses with 10 or more employees for a week in mid-October.
The results reveals that nearly 7 in 10 (69 per cent) of domestic manufacturing firms with 10 or more employees are currently exporting.
Among the firms that are yet to export, there is significant demand to start doing so, with almost two thirds (63 per cent) looking to start selling overseas in 2022.
This is despite continued issues with Covid-19 restrictions and supply chain disruption, with 7 in 10 (71 per cent) of manufacturers stating the pandemic continues to have a negative impact on their businesses.
To mitigate disruption, over two fifths (43 per cent) are diversifying their global supply base, while 40 per cent are setting up overseas warehousing space
Exporters in need of more information to benefit from global trade opportunities
Meanwhile, there are differences in target markets between exporters and non-exporters.
Non-exporters are more likely to favour European markets, with three in ten (30 per cent) saying they would target Germany initially, followed by The Netherlands (24 per cent) and the US (24 per cent).
By contrast, the US is the market that most current exporters (30 per cent) sell to, followed by Germany (26 per cent) and France (26 per cent).
Beyond the EU and the US, current exporters are most likely to be trading in Canada (23 per cent), India (19 per cent), or Latin America (17 per cent)
The new findings coincide with the Government’s refreshed export strategy, ‘Made in the UK, Sold to the World’, which was published in November – pushing exporters to embrace international markets.
The Europe-focused outlook of potential exporters suggests knowledge gaps will need to be narrowed for the UK to fulfil its ambitions.
As it stands, only four in 10 respondents are aware of current or emerging initiatives to encourage international trade, such as the UK’s bid to join the Trans-Pacific Partnership (42 per cent) and the recently signed free trade agreements with Japan (41 per cent) and Australia (39 per cent).
Barely a third (35 per cent) were aware of plans to create eight new freeports in England, which offer tax breaks for manufacturers on the import of materials.
Richard Craven, manufacturing industry director, Barclays noted the British manufacturing sector “has endured a tough year” amid higher labour costs, higher material costs and supply chain issues.
He said: “However, exporters, more than most, have weathered the storms and are enjoying strong demand for their products in markets all around the world. Confidence is high and many firms are looking to exports to fulfil their growth ambitions next year and beyond.”