Make UK/Santander analysis shows Europe remains the dominant market for UK goods

The importance of the UK agreeing a deal with the EU which avoids barriers to trade has been laid bare by new analysis which shows the value of trade with the bloc is worth more than twice that of the United States, with seven of the UK’s top export destinations within the EU.

According to ‘UK Manufacturing: 2019/20 The Facts', the annual analysis of the sector published by Make UK and Santander, whilst the United States is the single biggest export market for UK manufactured goods and services, worth £118.2 billion, exports to the top seven EU markets alone amounted to £236.5 billion in the same period.

Broken down sector by sector, the export picture of manufactured goods is dominated by Transport (25.5 per cent), and Pharmaceuticals and Chemicals (17.9 per cent), which highlight the importance of these high value added sectors to the success of UK industry overall, and the aerospace and automotive sectors in particular.

The importance of the top two dominant exporting sectors is also reflected in contribution to business R&D, where Pharmaceuticals and Chemicals and Transport accounted for almost 70 per cent of the total spend between them.

The transport sector also led the way in export growth increasing by 7.4 per cent, largely on the back of continued growth in aerospace, closely followed by food and drink, which increased exports by 5.3 per cent.

The analysis by Make UK and Santander shows that manufacturing remains central to the success of the economy overall, accounting for two thirds of overall R&D, 45 per cent of exports, 15 per cent of business investment, and 2.7 million high value jobs which are better paid than the economic average.

With an annual output of £192 billion, the UK remains the ninth largest manufacturing nation in the world.

Seamus Nevin, Chief Economist at Make UK, said: “These figures lay bare the overwhelming importance for manufacturers of trade with our closest market and the need to avoid imposing any barriers which will make this more difficult.”

“Whilst the United States remains the biggest market and present significant opportunities for export growth, it is a fallacy to believe that geography is not the biggest factor driving trade. For UK manufacturers, access to their biggest market must be a premium.”

“The figures also provide an important reminder that we’re still one of the top ten biggest manufacturing nations and we want to see policy makers working with industry to help move UK manufacturing up the rankings.”

Paul Brooks, UK Head of Manufacturing at Santander, said: “The UK has always punched well above its weight when it comes to exports and it’s vital that this trend continues, as jobs across the UK count on it.”

“While we are helping businesses build strong trade links with partners around the world, the message from manufacturers is clear; Europe must remain a strong trade ally.”

“We’ll continue to support the UK to hold its position as a major global economy.”