UK World’s 4th Biggest Exporter

 

 

Figures from the UN Conference on Trade and Development (UNCTAD) published last week have shown that the UK is now the world’s 4th biggest exporter.

This might come as a surprise to people who watch the news each night and see story after story about a failing Britain, but the truth is, as always, that Britain is open for business and remains a major player on the world economic stage.

It’s worth noting however that these numbers include all exports, and a significant percentage therefore relates to services rather than physical goods.  The UK’s services exports grew to a record high of £470bn last year, with professional services, such as research, consulting and technical and trade services, contributing £185bn in 2023.

The UK is 8th on the list of world exporters when it comes to manufactured goods, with a total of £224 billion in manufactured goods output in 2023.   Manufactured goods make up 49% of all UK exports.  8th place is still one position better than the previous year and is perhaps higher up the table than many people would have guessed.  It might be of interest that the USA is the UK’s biggest export market accounting for £56.7bn, or just over 25% of all exported manufactured products.  There is scope for this to increase substantially if a trade agreement is reached with the US after the next Presidential election.

Why is the UK doing so well in terms of exports?  There are plenty of reasons.

Diverse Export Portfolio

One of the key strengths of the UK’s export sector lies in its diversity. The UK exports a wide range of goods and services, from vehicles and machinery to financial services and pharmaceuticals.

Vehicle manufacturing, led by iconic brands like Jaguar Land Rover and Rolls-Royce, contributes significantly to the UK’s export revenue. The aerospace industry is another major player, with companies like BAE Systems and Airbus UK exporting high-tech aircraft and components to markets around the world. The manufacturing sector employs 2.6 million people in the UK.

Financial services, centred around London’s global financial hub, also make a substantial contribution to UK exports. The City of London is a leading centre for banking, insurance, and asset management services, attracting clients and investors from across the globe.

Innovation and Technology

The UK’s commitment to innovation and technology has been a driving force behind its export success. The country is home to some of the world’s leading universities and research institutions, fostering a culture of innovation and entrepreneurship.

Tech startups and established companies alike are developing cutting-edge technologies in fields such as artificial intelligence, biotechnology, and renewable energy. These innovations not only create new export opportunities but also enhance the competitiveness of UK exports in global markets.  The manufacturing sector contributes 41% of all business R&D.

Global Trade Partnerships

The UK’s export growth has also been supported by its active participation in global trade partnerships. Despite the challenges posed by Brexit, the UK has been successful in negotiating new trade agreements with countries around the world, including Japan, Canada, and Australia.

These trade agreements have opened up new markets for UK exporters, reducing tariffs and trade barriers and providing them with greater access to global supply chains. Moreover, the UK’s membership of organizations like the World Trade Organization (WTO) and the G7 enhances its position on the global stage.

The Department for Business and Trade (DBT) is still negotiating several trade agreements, including with India, which have been put on hold until later this year and last month signed a trade pact with Texas, the second biggest US state and the world’s eighth largest economy.

Challenges Ahead

While the UK’s export sector has shown remarkable resilience and growth, it still faces challenges that need to be addressed. Infrastructure constraints, skills shortages, and regulatory barriers can hinder the competitiveness of UK exporters in global markets.

Geopolitical uncertainties and global economic volatility can pose risks to the UK’s export-driven growth.  Thanks to various UK government policies, and the green agenda, the UK pays more for its energy than many of the countries ahead of it on the manufacturing exporter list, and this places significant cost pressure on UK manufacturers who are competing on the world stage.

Financing                                                                                                                                                                                    

The UK’s status as the fourth-largest exporter in the world is a remarkable achievement that highlights the strength and dynamism of its economy. With its diverse export portfolio, commitment to innovation, and proactive approach to global trade partnerships, the UK is well-positioned to capitalize on new opportunities and overcome challenges.

As the UK continues to navigate the post-Brexit landscape and the evolving global economic environment, maintaining a strong focus on promoting exports providing finance to companies involved in exports will be essential, especially those companies involved in manufacturing.  The manufacturing sector accounts for 16% of UK business investment and this number needs to grow if the UK is to improve on its 8th place ranking.

Here at Seneca, we provide revolving trade and stock finance to UK SMEs involved in import and export.  We fund all sectors and assist all manner of companies; from startups just getting going with their first orders, to established businesses looking for growth in new markets with new customers.  Our sector-leading back-office technology and client-facing App allows us to make fast decisions and provides our clients with full transparency and control over their revolving working capital facilities.

If your business or any of your clients’ businesses, could utilise a revolving stock finance facility, please contact us for more information.  We love to chat about this stuff.

 

 

 

 

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