Global sales of British manufactured goods to add £9.3bn to the Welsh economy this year
- International sales of British-made goods will bring in £9.3bn to the Welsh economy this year and currently support 40,400 manufacturing jobs in the area
- Food and drink products (£34.3bn in sales per year) are the country’s biggest selling manufactured product on the global stage, followed by automotive products (£20.9bn)
- Manufacturers who export are more likely to have achieved ‘significant growth’ this year than those who don’t: 26% vs 18%
- 75% of non-exporting manufacturers plan to start in 2022: their sales could see these exports worth £10.1bn per year to the Welsh economy by 2030, an annual increase of £854m over current levels
UK manufacturing exports will bring in around £9.3bn* to the Welsh economy this year, according to a new study** from Barclays Corporate Banking. What’s more, the plans of manufacturers who don’t currently export to start selling their products overseas could see that total soar to £10.1bn a year by 2030.
Barclays’ new report – The Export Dividend – shows that, despite widespread supply chain disruption and challenges brought on by the global pandemic and the UK’s exit from the EU, 69% of manufacturing firms with 10 or more employees in Wales are currently exporting. 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 three quarters (75%) in the Wales aiming to start selling overseas in 2022. If they do, Barclays’ economic modelling predicts it could be worth an additional £107m to the local economy next year, and an additional £854m 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%).
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 Wales are aware of current or emerging initiatives to encourage international trade, such as the UK’s bid to join the Trans-Pacific Partnership (48%) and the recently signed free trade agreements with Japan (40%) and Australia (40%).
Meanwhile, only around a quarter (25%) 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 85% saying they plan to make use of them once they come online.
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.”
Other findings from The Export Dividend report include:
- 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%)
References
* 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.