Business

British trade expected to bring in £14.4bn for the Scottish economy



The Scottish economy is set to receive £14.4bn from the international sale of British-made goods, supporting 72,900 manufacturing jobs in the country this year.

Barclays analysis noted that the plans of manufacturers, which currently do not export, when they start selling their products overseas, could see the total increase to £14.7bn by 2030.

The new report stated that despite widespread supply chain disruption and challenges brought on by the global pandemic and Brexit, 84% of manufacturing firms with 10 or more employees in Scotland are currently exporting.

Across the UK, British food and drink producers have secured £34.3bn in sales on a global scale. They are followed by automotive manufacturers, with £20.9bn.

Barclays Corporate Banking commissioned Censuswide to run a survey of 604 senior managers or above in manufacturing businesses with 10 or more employees in October.

More than a quarter (26%) of respondents who sell overseas said they had seen ‘significant growth’ in 2021, while only 18% of non-exporters said the same.

Meanwhile, manufacturers who export are also more confident about their prospects in 2022 at 88%, compared to 71% of those who don’t currently export.

There is significant demand in Scotland, among those who currently are not exporting their products, to start doing so with half aiming to start selling overseas in 2022.

If they do, Barclays’ economic modelling predicts it could be worth an additional £39m to the local economy next year, and an additional £316m per year by 2030.

Non-exporters in the UK are more likely to favour European markets, with 30% saying they would target Germany initially, followed by The Netherlands (24%).

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In contrast, the US is the market that most current exporters (30%) sell to, followed by Germany (26%) and France (26%).

As it stands, far from all manufacturers in Scotland are aware of current or emerging initiatives to encourage international trade, such as the UK’s bid to join the Trans-Pacific Partnership (46%) and the recently signed free trade agreements with Japan (50%) and Australia (36%).

Only a third in Scotland (34%) were aware of the plans to create eight new freeports in England, which offer tax breaks for manufacturers on the import of materials. However, those familiar with freeports were very positive about the scheme with 71% saying they plan to make use of them once they come online.

The report also found that 71% of manufacturers agreed that the pandemic continues to have an adverse impact on their business operations.

To mitigate disruption, more than two fifths (43%) are diversifying their global supply base, while 40% are setting up overseas warehousing space.

Beyond the EU and the US, current exporters are most likely to be trading in Canada (23%), India (19%), or Latin America (17%).

Andy Hall, head of corporate banking at Barclays Central Scotland, said: “Our exporters have weathered the Covid and Brexit storms and it is pleasing to see a strong demand for their products globally.

“Confidence is high and many Scottish firms are looking to exports to fulfil their growth ambitions next year and beyond, with half of those who don’t yet export overseas aiming to start in 2022.”

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Minister for Exports Mike Freer added: “For our world-renowned food and drink sector, which totalled £21.7bn in exports last year, we have specialist food and drink attaches in key global markets, ready to facilitate trading relationships between UK businesses and new markets, showcasing the best of Britain on a truly international stage.

“My department offers a range of support for businesses who want to take advantage of what exporting has to offer, namely our recently-published Export Strategy and new Export Academy which will provide guidance to businesses exporting for the first time.”

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