Export boost to power UK manufacturing to top of world stage

Polestar works with manufacturers across numerous verticals such as  precision engineers, defence, electronics and building materials. One thing they all have in common is a desire to be world class, but a feeling of being hampered by government policies such as Brexit in addition to the unknowns surrounding world markets caused by COVID-19 and trade wars.  Our clients are talking to us about investment in technology for UK production in equal measure with offshoring lower cost production to the Far East.  We are often asked what we think will happen to UK Manufacturing – Well MADE UK has just released its International Trade report 2020. This gives a really comprehensive “state of the nation” and is worth a hour or two of your time.

It highlights that British manufacturing companies are already major players in the global export market, with 95% of UK companies sending goods overseas, ensuring we have a manufacturing sector much larger and more powerful than it would be based solely on domestic consumption

However, in order to protect the economic wellbeing of communities across the whole of the UK and the 2.7 million manufacturing jobs the sector provides nationally, UK manufacturing needs even more export support so companies can compete in global markets as the UK begins its new journey outside the EU. 


Manufacturers export for a range of reasons, % companies stating why they export their goods and/or services


Top 10 fastest growing UK export markets

Some 97% of companies which export in the UK do so directly to the EU, and while manufacturing currently contributes 53% of UK exports, the uncertainty over future trading arrangements with the EU makes taking advantage of new export opportunities more important than ever.

The Government has rightly focussed on growing exports in recent years and its target to grow exports as a proportion of UK GDP to 35% is welcome.  To further power UK exports, MADE UK says that the Department of International Trade should develop a network of on-the-ground experts in local markets which will be critical to launch smaller companies successfully into new markets. Understanding how local markets work is essential to taking advantage of fresh opportunities and growing business overseas, but the dynamics and culture of each market are distinct and differ greatly. Sometimes the answer to ‘why is no one else exporting to this market?’ is that ‘it is too difficult’ and this is where local knowledge is key. 

“British manufacturers have always exported their high-quality goods around the world and the new trade deals which are currently being negotiated should open up a myriad of opportunities. But making sure smaller businesses, which are often the most innovative, are able to take advantage of these new opportunities will be vital if we are to fully maximise the potential trade benefits.  This means bespoke support which is simple to understand and easy to obtain, helping them to access true experts on the ground with the right local knowledge.

In tandem with this, Government must look to build a structure of reliable advice with a database of overseas companies in each country to help manufacturers make those first steps effectively, allowing them to carry out effective market research to make considered decisions. This should sit alongside a financial package to boost skills base for exporters to improve technical capability. “

Stephen Phipson – CEO, Make UK

While the survey went on to show that 40% of manufacturers had taken advantage of current Government export services, a number of respondents said the information was too complicated to understand and access. There is an opportunity for Government to simplify and increase awareness of the export services on offer and a good start point would be to establish a database of overseas companies in each country as a basis for effective market research. There should also be an overhaul of the ‘ease of doing business’ guides already available for key export markets to help businesses take that first tentative step.

A bespoke financial package to help manufacturers improve their knowledge of new markets would be a further boost – looking to improve capability around export controls, the bribery act, individual customs and VAT procedures, regulation, insurance, compliance issues, payment terms and logistics. Businesses will also need quick access to information on local rules for each country they send their workers into so they understand the technical requirements of each region.  This would work best in the form of a single national website making regulatory access for each country clear and accessible.

Companies are still adapting to new circumstances and rebuilding their businesses as we begin to come out of the worst of the COVID crisis, Government could build on the package of grants available to help exporters attend trade shows and similar events overseas, with over a third (34%) of respondents to the survey telling us that such support would have a positive and immediate impact.  So please lobby hard for our industry.

In the meantime, investors and funders remain keen to work with dynamic, robust manufacturers who have demonstrated high levels of resilience during the downturn.  This could be a great time for you to secure funding to enable you move your business on to the next level, as ever we are happy to talk through your options.

British manufacturing companies are already major players in the global export market, with 95% of UK companies sending goods overseas, ensuring we have a manufacturing sector much larger and more powerful than it would be based solely on domestic consumption

By Charles Whelan on 27/10/2020