Export support must reflect companies’ efforts to grow into new markets

The majority of English regions and Wales are seeing a downward trend in their share of manufacturing exports to the EU, suggesting a potential structural shift in the UK’s trade patterns, according to analysis published by Make UK and accountancy and business advisory firm BDO.

The analysis of official data as part of the Make UK/BDO Regional Manufacturing Outlook Report 2023 shows that the UK’s overall share of manufacturing exports to the EU increased in 2022 to 52% from 50% in 2019. However, this was a result of sharp increases in the share of exports to the EU from Northern Ireland and Scotland over the same period, without which the overall UK share of goods exports would also be on a downward trend.

Northern Ireland enjoys a unique Dual Access position retaining access to the Single Market for goods and being able to trade goods freely into the rest of Great Britain, while in Scotland, the oil and gas sector and its supply chains boosted exports to the EU during the ongoing Ukraine crisis.

Furthermore, given the share of goods exports to both Asia & Oceania and North America has remained relatively stable at around 16% since 2019, this would indicate that UK manufacturers are looking at opportunities outside their traditional big three markets.

According to Make UK, this has significant implications for Government policy on export support if the share of trade with the UK’s nearest and most important market is falling and businesses are looking for opportunities elsewhere. In response, Make UK is calling for a boost to export support for companies, especially SMEs, as well as changes to existing structures, to provide more support for companies exporting to countries outside the EU.

In order to help boost exports, especially by SMEs, Make UK has made the following recommendations:

1. Extend the geographical reach of the Export Support Service (ESS). The ESS should be extended to include all key UK export markets, not limited to the EU. In addition, a ‘continuous improvement’ approach to the advice available should be embedded as early evidence suggests in its current form it is a ‘signposting’ service and not for bespoke advisory work.

2. Ensure the package of grants and practical support to assist exporters in attending trade shows and similar events overseas remains in step with export market priorities and demands of exporters: Government should consider re-instating the Trade Access Programme (TAP), which was valued by manufacturing SMEs. This would help ensure current programmes meet the demands and priorities of existing and potential exporters.

3. The Export Academy (or similar channel) should create a bespoke financial package to boost the skills base for exporters to improve their knowledge in exporting. Company-level exporting strategies should be as important as a marketing or business development strategy; however, businesses do not have easy access to provisions to help build that expertise domestically. Too often, business export strategies are underutilised; therefore, there is a need to identify partners to build up UK expertise on trade through schools, universities and within business.

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