TRADE matters to the UK economy. And as we prepare for Brexit and to leave the single market and current customs union, it matters more than it has for a generation.
According to the Office of National Statistics, in the three months to January 2018, there has been a widening of the trade in goods deficit due mainly to a £1.3 billion increase in imports from non-EU countries, combined with a £1.2 billion decrease in exports to non-EU countries.
And, despite a positive trade balance in services since 1997, we now have a deficit in goods of around £130 billion, offset partially by a significant surplus in services, which nets around £31 billion – the equivalent of more than £1,100 for every household in the UK.
In the UK, exports represent only 28% of GDP, putting us bottom of the list of comparable nations in the European Union. Germany scores best – its exports were worth 46% of its GDP – but Spain (32%), Italy (30%), and France (29%) are all ahead of the UK.
So we are punching below our weight in international markets.
Fortunately, this trade challenge is getting more focus now, more than at any other time I can remember. As we start to look at the future of UK trade after Brexit, a welcome spotlight has been shone on the importance of exports for our future prosperity.
Private businesses face a tough challenge; to grow and expand in a potentially flat domestic market.
All businesses, whatever size, must seriously consider the benefits of exporting and expanding operations overseas when looking to drive growth, whether that’s exporting to access to new customers, setting up a joint venture or strategic partnership, acquiring a business or growing organically.
But understanding the complexities of expansion into new markets can be daunting, especially when, in many cases, this is a ‘first’ and a step into the unknown.
To address these concerns, this month (March) sees the launch of PwC’s #5daysof Trade and Export campaign, designed to showcase the experiences of private businesses of all sizes from across the UK that have grown their businesses through trade and export.
The stories we have gathered are indeed inspiring and we hope helpful to those businesses thinking of embarking on the first steps towards exporting their goods and services.
In fact, a great example of a business from Milton Keynes reaping the benefits of exporting is Niftylift. The business has grown to be one of the world’s leading manufacturers of mobile elevated work platforms, with over 400 employees in the UK and USA, alongside a vast dealer network across over 40 countries worldwide to support the 75% of sales as exports.
Further to the campaign, to support our clients, we have established a Trade and Investment Hive – a network of experts across and outside PwC including the Department for International Trade in the UK and abroad with deep trade policy and customs expertise.
The export challenge is one we all have a stake in, whether you are private sector or public sector, young or old, for or against Brexit.
The UK as a whole will be better off if we can improve our export performance.
- For more information on the #5daysof Trade and Export campaign, click here.
Ruby Parmar is senior officer partner at PwC’s Milton Keynes office
