New research reveals the UK’s fastest growing export partners are dominated by countries in Asia Pacific with three in the top five. Europe and the Middle East also rank with one each. Exports to these five countries were worth US$71bn last year. The projected growth means that these markets could generate an extra US$2.1bn a year for UK exports.
|Rank (fastest growing)||Country||Growth rate a year to 2021||Value in 2017 (US$)||Project growth (value US$)|
Wyelands Bank commissioned the research to better understand the role of imports and exports in the UK economy. Regionally, Europe remains the UK’s biggest trading partner for exports with a 46.3% share. North America is next with 17.2%, while Asia Pacific (7%), Sub-Saharan Africa (5.4%), Mena (1.8%) and South America (1.2%) follow.
However, the fastest growing market is Asia Pacific, where exports are expected to grow at 3% a year to 2021. South America, where UK exports are expected to grow by around 0.5% annually until 2021, is the second fastest growth region.
Iain Hunter, CEO of Wyelands Bank, said: “Behind these headline economic figures, trade is important because it creates jobs. It has helped to contribute to the UK’s record employment levels, providing financial security for millions of families up and down the country. However, in order for businesses to succeed, they need working capital. It is only by providing better access to funding that we can support businesses to trade, grow and create jobs.”
SMEs driving growth and innovation
The analysis also shows that more than twice the number of UK small and medium sized enterprises (SMEs) trade internationally than government figures estimate. Some 30% of SMEs trade internationally against just 12.9% according to a government survey in 2016.
Among SMEs, the sectors with the highest international turnovers are professional and business services at 26% and manufacturing at 24%. In addition, 10% of retail and wholesale SMEs have international turnovers, as well as 9% of ICT SMEs.
Mr Hunter added: “SMEs are vital to UK trade because they are often ambitious and entrepreneurial. In addition, they are also a vital source of innovation. Smaller, more innovative companies – especially in manufacturing – play an important part in the UK’s capacity to form a crucial part of global supply chains.”
Overall, the UK economy is highly dependent on trade. It accounts for 58% of UK GDP. This makes the UK economy one of the most open in the G20, and more open than China, America and Japan. In 2016, the UK exported goods worth US$433.5bn and imported goods worth US$678.1bn.
Hybrid “manufacturing as a service” emerging
The research also shows the emergence of a new hybrid category of goods and services: manufacturing as a service. This new sector is forecast to grow at 2.6% a year to 2021. The research also shows that three key sectors will dominate UK trade in goods, when assessed by the value of exports:
- Automotives at US$55bn now and expected to grow at 1.7% a year to 2021
- Pharmaceuticals at US$33bn now and expected to grow by 0.8% a year to 2021
- Aerospace at $21.5bn now and expected to grow by 3.7% a year to 2021
Meanwhile, two key sectors dominate both imports and exports for services:
- Business services imports and exports are worth US$113.6bn a year now and expected grow at 0.9% a year to 2021
- Financial services imports and exports are worth US$78.6bn a year now and expected to grow at 2.6% a year until 2021
The research was prepared in collaboration with Global Trade Review which provided the data.