Trade figures released this morning showed that the UK’s trade in goods deficit was unchanged between February and March.
While exports to Europe were flat over the month, reflecting challenging economic conditions in the region, exports to non-EU countries continue to look strong. Non-EU markets are providing a real boost to exporters: once again, hitting a record level in March.
EEF’s recent export survey showed that even amid the economic turmoil we saw last year, nearly 65% of companies surveyed saw an increase in total export sales in the last twelve months. The focus of exporters is predominately geared towards emerging markets, where manufacturers expect to see strong growth in the next five years. As domestic and traditional markets remain weak, 45% of companies said they were more interested in exporting to new markets than they were a year ago.
However, challenges remain for UK manufacturers. It is still the case that around half of all UK exports go to Europe. With news this morning that the region narrowly missed a return to technical recession, and a Greek exit looking increasingly likely, the economic situation on the other side of the Channel will remain a challenge for UK companies.
Similarly, exporting to emerging markets is not easy. There are specific barriers to entry into most new export markets, from business practice or language differences to exchange rates or poor credit protection; or a lack of knowledge about specific markets.
But UK manufacturers are ambitious, and are putting the foundations in place to continue the growth in exports to new markets that we have seen throughout the recovery so far.