UK exports set to reach £896bn by end of decade
THE value of UK exports will hit £896bn by the end of the decade as the economic recovery takes hold.
That’s according to an EY ITEM Club special report on UK export performance, released this morning, which forecasts a gradual acceleration in exports over the medium term underpinned by growing demand from traditional trading partners, such as the EU and US, leading export values to grow by 5.7% until 2023.
The UK is set to increase its growth rates in the value of exports to France, from an average of 0.4% over the last decade to 4.2% in the next 10 years, Italy from -1.8% to 3.8%, and the US from -1.2% to 6.4%.
The UK is forecast to maintain rates of exports to China, slowing only slightly in value from an average of 11.9% in the last decade to over 10.8% from 2013 to 2023. This represents a significant achievement given China’s GDP growth is expected to decelerate from 10.2% on average to 6.9%.
In Brazil, growth rates in the value of UK exports will similarly slow from 8.1% to 7.5%, while the UK is set to increase its trade links significantly in India, with export growth forecast to rise from 5.1% to 12.4% by 2023.
The report shows that the highest levels of UK goods export growth in the next decade will come from the machinery and transport equipment sector (8%), chemicals (6.5%), and manufactured goods (6.3%).
However, the EY ITEM Club says the UK has an opportunity to boost its export performance further by identifying markets with the best growth opportunities; focusing on sources of the UK’s competitive advantage; and exploiting sources of differentiation in key areas such as pharmaceuticals and branded goods.
Carl Astorri, senior economic advisor to the EY ITEM Club, said: “UK exports are set to grow at a substantial rate, but even more is possible. In the past four years, we have consistently lagged behind competitors, with Germany achieving double the rate of the UK’s 17% growth and the US achieving 30% growth over the same period.
“By following a more sophisticated strategy, there are opportunities to reverse this trend, re-focusing attention on the markets and sectors which best play to the UK’s strengths.
“We are seeing rising UK exports to France and Italy, while the US economy is growing and Chinese consumers are being urged to spend more and save less.
“The UK Government is already acting to address this challenge, as demonstrated by the recent education reforms and the planned trade mission to China. But such actions need to form the catalyst for a concerted export drive by both Government and business.”
