Value-added export stats reveal interesting detail in UK manufactuing

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A couple of days ago the OECD released some stats from the Trade in Value-Added (TiVA) database put together with the WTO. Although the figures relate to 2009 they still make some interesting reading.

The OECD's main findings were:

The U.S. trade relationship is stronger in value-added than gross terms with shares of both imports and exports higher;

The UK's trade deficits with France and China are smaller in VA terms - reflecting the lower value-added in these countries' exports to the UK;

Services industries generate 60% of the value of the UK's gross exports with the UK's manufactured exports containing considerable services content.

It's interesting what the data suggests about UK trade. The higher VA deficit (relative to gross) with Germany for example underlines that many UK exports to Germany are intermediate products that are then further processed and exported from Germany.

Industry-level results make interesting reading too. Broken down by value-added inside and outside the UK it shows that some manufacturing sectors have considerable foreign value-added. Metals, transport equipment, and chemicals and minerals all have more than 20% foreign value-added.

For transport equipment, which includes motor vehicle production, it shows that there is still considerable scope for supply chains to be rebuilt in the UK and take advantage of the strength in exports from the OEMs with facilities here.

The services content embedded in gross exports also reveals the interdependence between manufacturing and services industries in the UK. Over 30% of the value of textiles and apparel and transport equipment exports come from services.

This point again underlines for me the importance of manufacturing to the rest of the economy and why overall stats on manufacturing's share of total output need to be interpreted cautiously.


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