A panel of experts share their insight and top tips on how to access new markets with confidence, improve competitiveness and productivity, and prepare for the risks and challenges.
Ways in which increasing international trade could benefit UK manufacturing
- Open up new markets
- Boost exports
- Foster economic growth
- Access to a larger customer base
- Enhanced competitiveness
- Specialisation leading to improved efficiency and innovation
According to Make UK, manufacturing accounted for 49% of all UK exports in 2023, contributing over £432bn to the economy, of which £230bn was exported to the European Union.
“In an increasingly interconnected world, the importance of trading globally cannot be overstated, particularly for a manufacturing powerhouse like the UK. “However, although there are signs that more companies are undertaking export activity, this is tempered by reduced volumes of trade overall.”
Laura Capper, Head of Manufacturing & Construction, NatWest
The future of manufacturing: Trade outlook
Although global trade growth in 2023 was lower than previous years, there is an expectation that global trade and confidence will improve in 2024, says Richard Rumbelow, Director of International Business, Make UK.
“There is a positive outlook from manufacturers in terms of global trade, and of how they think the economy could perform and translate into trade activity. But it’s a fragile outlook, and subject to immediate change.”
Several considerations and factors have brought us to this point, he adds.
The pandemic response and subsequent increase in costs in major economies pushed inflation to new heights. Other drivers of disruption persist that need to be considered by active trading customers whether in the UK or overseas; the war in Ukraine drove up commodity prices, while attacks across major shipping routes in the Red Sea and Suez Canal led to a short-term trebling of freight delivery cost and similarly steep rises in delivery times.
And a series of measures have resulted in trade restrictions hindering access to the US and EU markets for some. These include the Inflation Reduction Act and the CHIPS and Science Act in the US, plus similar measures to stimulate manufacturing capacity and growth in the EU.
Check out NatWest’s Trade Tracker, a monthly series that delves into the latest trade data and trends.
Seven reasons to export and accelerate your growth
Rimante Bang, UK Export Academy Adviser at the Department of Business and Trade shares some of the potential benefits of selling overseas:
- Drive more sales
Tapping into new markets and customer segments could increase your sales, revenue streams and sometimes profit margins. - Reduce commercial risk
Diversifying the markets that you are trading with could help mitigate the risks associated with relying solely on domestic sales by spreading your activity more widely. - Improve your competitiveness
Successfully entering international markets could enhance your brand image and reputation. - Motivate your employees
Staff tend to experience more growth in their business, plus opportunities to upskill and explore new countries. - Gain new ideas
Exporting exposes businesses to new ideas, technologies, and different business practices, which could then be implemented successfully in the domestic market. - Benefit from economies of scale
Greater production could lead to better profit margins and increased competitiveness of your business. - Reduce the impact of seasonal fluctuations
Because in some markets around the world, seasons could be different or extended for longer.
This content was written by NatWest, one of the METALL sponsors. Click here to visit the original article and listen to all their insight and practical export tips from this webinar.