Brexit trade deal vital, say UK manufacturers

Make UK and Santander report highlights the "overwhelming importance" of the UK reaching a post-Brexit trade deal with the EU, with exports to all European nations accounting for almost half of the UK's total.

Construction hard hat in front of a union jack flag

David Sapsted

17 September 2020

The "overwhelming importance" of the UK reaching a post-Brexit trade deal with the European Union has been highlighted in a report by Britain's largest manufacturing trade organisation.Prepared by Make UK and Santander bank, the report found that six European nations – Germany, France, Ireland, the Netherlands, Switzerland and Belgium – accounted for a third of all Britain's manufacturing exports, worth an annual £117.4 billion.While research for the report, ‘UK Manufacturing Facts, 2020-21’, confirmed that the US was the largest single importer of UK manufactured products, exports to all European nations accounted for almost half (46%) of the UK's global total of £367 billion last year.The report comes at a time when talks between the UK and EU on a trade deal to come into effect when the Brexit transition period ends on December 31 appear deadlocked, with each side accusing the other of intransigence.Stephen Phipson, chief executive of Make UK, said, "These figures lay bare the overwhelming importance for manufacturers of trade with our closest market and the need to avoid imposing any barriers which will make this more difficult."Whilst the United States remains the biggest market and presents significant opportunities for export growth, it is a fallacy to believe that geography is not the biggest factor driving trade. For UK manufacturers, access to their biggest market must be a premium."The figures also provide an important reminder that we're still one of the top ten biggest manufacturing nations and we want to see policy-makers working with industry to help move UK manufacturing up the rankings."While the report said the US is the single largest importer of UK manufactured products, it pointed out that seven of the top ten UK export markets were based in Europe, including Germany (2nd), France (3rd) and Ireland (4th). China, ranked fifth, was the only other top ten destination for UK goods outside of Europe and the US. Exports to the US saw a 19% last year and were worth £54.4 billion.The research also showed that the UK retained its position as the world's ninth largest producer of manufactured goods and tenth in terms of global exports, with output growing by 7% over the past five years.Some 2.7 million people were employed by UK manufacturers, according to the report, which was based on data compiled before the coronavirus lockdown. The sector's average salary stood at £34,538, about 13% above the national average.Transport manufacturers represented the largest exporters (225), while food and drink remained the leading sub-sector for output. "Transport also generated the most in terms of R&D," said Make UK. "This spend on R&D highlights the critical importance of the automotive and aerospace sectors to the long-term high value growth of the economy, despite the major impact of the pandemic on these two sectors in particular."Paul Brooks, head of manufacturing at Santander UK, said, "Our manufacturers have shown unyielding resilience over recent months."Retaining our position as the ninth leading manufacturer makes it clear that the UK is still a major player on the international stage, but we must not rest on our laurels. This data underlines the importance of prioritising manufacturing as the UK establishes new trading relationships with partners around the world."