UK exports show rates of improvements | 9th March 2015
With the UK’s general election rapidly approaching, it will have come as good news to all parties that Europe’s export orders to the UK were showing a marked increase. A quarterly survey by manufacturers’ organisation EEF and law firm DLA Piper reported findings that export orders were increasing and were moving out of negative territory for the first time in nine months.
Accordingly, Delta Economics forecasts that while the UK’s total exports to Europe are still falling, they will decrease at a slower rate from this year until 2018, when they will finally reach positive rates of growth. This is important and timely news for the major political parties vying for election success. Many parties have promoted ideas of policy refocus, particularly increasing the UK’s exports as a means of shifting the UK’s balance of trade further towards surplus.
However, the formation of effective policy to instigate this change will be tough. Delta Economics forecasts that the UK’s trade deficit is expected to decrease slightly over the next two years but will then continue to increase steadily for several years after that. Although this is worrying for the UK given efforts to address the deficit, investments into key sectors could help exports flourish.
For example, of its largest export sectors, the UK’s exports of meat are expected to grow by over 3% this year, suggesting that they are expanding international opportunities for the farming industry. Similarly, UK exports of clothing are also expected to be amongst the fastest growing sectors this year. This could also mark some significant opportunities for the British garment manufacturing sector.
What is becoming increasingly apparent in the policy structures that are emerging in the run up to the election is that the UK’s export industry has the potential to contribute significantly to the recovery and prosperity of the British economy. What remains to be seen is how well existing opportunities are nurtured and built into sustainable growth industries.
Figure 1 | UK exports show rates of improvements
Source | DeltaMetrics 2015
UK exports show rates of improvements | Author | Nayani Bandara | Analyst and Project Manager