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Posted on 30 Nov 2013 by The Manufacturer

EEF chief executive Terry Scuoler asks manufacturers to make export growth their New Year resolution.

Terry Scuoler, EEF Chief Executive

Amid more positive economic news, commentators and economists continue to press home the need for the UK economy to move away from growth fuelled by debt and consumption towards one built on net trade and investment.

Yet despite recent improvement in our trade performance we remain on the back foot when it comes to rebalancing our economy and achieving the government’s ambitious target to generate an annual £1 trillion from exports by 2020.

The average contribution of net trade to growth was minimal from 2010 to 2013 – lower that Spain, Italy and France. Achieving the £1 trillion target requires exports to grow by 9.2% a year from 2013.

The challenge is Olympian, but, as a notion, we proved last year that we can rise to such challenges effectively when the right combination of government support and business ambition is in place.

The incentive for businesses to increase exports is plain. Exporting is good for business development, innovation, jobs and growth.

Manufacturing is the key export growth driver. It produces over half of all UK exports and 86% of goods exports.

Three times as many manufacturers export compared with the rest of the economy and this is more pronounced for small and medium sized companies with almost half of manufacturing SMEs exporting compared with just 19% for the average SME across sectors.

Encouragingly, this sector strength is set to grow. In recent EEF research over half of the companies surveyed said they were planning to enter a new export market in the next 12 months.

This implies welcome growth in export beyond the EU, but while this is important, we should remember amid the current debate over Britain’s future role in Europe, that our clout and our ability to trade competitively across the world will increasingly depend on effective trade agreements such as that currently being negotiated with the US by the EU. Britain cannot afford to be on the outside looking in.

So the message is clear. Exporting is good for our economy and manufacturers are best positioned to lead the drive in meeting the nation’s ambitious export growth target.

For new comers to exporting, we appreciate that this challenge may be daunting. Entering new markets is not easy. It requires a lot of hard work and investment in time and money to develop relationships with new customers. The risks can also be high.

Providing and maintaining effective support for exporters is therefore critical.  But previous EEF research has shown that users of UKTI services rate the support and advice that it provides highly. They have used it to achieve objectives such as gaining access to information on customers and local customs that they otherwise would have been unable to source.

With UKTI clients generally becoming more export intensive, with operations in a wider range of markets than companies who chose to go it alone, we would therefore urge tentative exporters to seek out its services.

Maximising manufacturing exports is not just about getting more companies to export a little however.

We need more firms to become export intensive in order to make progress on that £1 trillion target and last year our industrial strategy, Route to Growth, aimed to boost by a quarter the number of companies for whom exports account for more than 50% of their turnover.

Disappointingly however, the latest UKTI figures show that far from moving towards this target we are heading in the wrong direction with the percentage of export intensive firms falling from 40% in 2010 to 33% in 2011 and, 28% in 2012.

Looking to 2014 we therefore need a government-led crusade where every Department, overseas Embassy and Consulate gets behind this effort to provide businesses with the confidence to be bold and ambitious in exporting to the world.