Manufacturing exports boost the West Midlands economy
UK manufacturing exports will bring in around £26.5bn to the West Midlands economy this year, according to a new study from Barclays Corporate Banking.
This figure could soar to £28bn a year by 2030 with plans to help manufacturers who don’t currently export to do so.
A huge 76% of West Midlands manufacturing firms with 10 or more employees are currently exporting, despite widespread supply chain disruption, challenges brought by the global pandemic and the UK’s exit from the EU, according to Barclays’ new report – The Export Dividend.
Which industries are benefiting the most from exporting?
Barclays research shows that across the UK, British food and drink producers are reaping the highest financial rewards, with £34.3bn in sales on a global scale. They are followed by automotive manufacturers, with £20.9bn.
On a national scale, exporters are also shown to have fared better this year than non-exporters. Over a quarter (26%) of the research respondents who sell overseas said they had seen ‘significant growth’ in 2021, only 18% of non-exporters said the same.
Meanwhile, manufacturers who export are also more confident about their prospects in 2022 with 88% of exporting businesses upbeat about their growth prospects, compared to 71% of those who don’t currently export.
Among those who don’t yet export, there is significant demand to start doing so with over half (58%) in the West Midlands aiming to start selling overseas in 2022. If they do, Barclays’ economic modelling predicts it could be worth an additional £182m to the local economy next year, and an additional £1.5bn per year by 2030.
Non-exporters are more likely to favour European markets, with 30% saying they would target Germany initially, followed by The Netherlands (24%) and the US (24%). In contrast, the US is the market that most current exporters (30%) sell to, followed by Germany (26%) and France (26%).
What can be done to encourage more firms to export?
The new findings coincide with the Government’s refreshed export strategy, ‘Made in the UK, Sold to the World’,which was published in November. Barclays’ research shows that knowledge gaps will need to be narrowed to fulfil its ambitions.
As it stands, far from all manufacturers in the West Midlands are aware of current or emerging initiatives to encourage international trade, such as the UK’s bid to join the Trans-Pacific Partnership (46%) and the recently signed free trade agreements with Japan (42%) and Australia (46%).
Meanwhile, only around four in ten (42%) were aware of the plans to create eight new freeports in England, which offer tax breaks for manufacturers on the import of materials. However, those familiar with freeports were very positive about the scheme with 62% saying they plan to make use of them once they come online.
What else has Barclays’ report - The Export Dividend found?
- 71% of manufacturers agree that the pandemic continues to have an adverse impact on their business operations
- To mitigate disruption, over two fifths (43%) are diversifying their global supply base, while 40% are setting up overseas warehousing space
- Beyond the EU and the US, current exporters are most likely to be trading in Canada (23%), India (19%), or Latin America (17%)
What have manufacturing experts at Barclays said about the report in their own words?
Richard Craven, Manufacturing Industry Director, Barclays Corporate Banking said: “The British manufacturing sector, like many others, has endured a tough year and around a third of our research respondents have been impacted by higher labour costs, higher material costs and other supply chain issues.
“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.”
About the research
Economic modelling was conducted by Development Economics Ltd, combining attitudinal survey responses with ONS data sources. The modelling uncovered statistically representative results for each UK manufacturing sub-sector and each UK region.
Barclays Corporate Banking commissioned Censuswide to run a survey of 604 18+ senior managers or above in manufacturing businesses with 10 or more employees, conducted between 11th October and 20th October 2021.
Barclays is a British universal bank. It is diversified by business, by different types of customer and client, and geography. Its businesses include consumer banking and payments operations around the world, as well as a top-tier, full service, global corporate and investment bank, all of which are supported by our service company which provides technology, operations and functional services across the Group.
A message from the editor:
Thank you for reading. BirminghamWorld is Birmingham’s latest news website, championing everything that is great about our city - reporting on news, lifestyle and sport. We want to start a community among our readers, so please follow us on Facebook,Twitter and Instagram, and keep the conversation going.