On the 6th March EEF will be hosting the first ever National Manufacturing Conference, in partnership with The Manufacturer. Ahead of this we’ll be discussing some of the key issues for UK manufacturing in a weekly blog.
The first discussion point is how to engineer growth through exports.
2012 is likely to be a challenging year. Government austerity will be a drag on growth. Spending byUKconsumers will also remain subdued, reflecting a weak labour market and the after-effects of high inflation. These challenges at home mean that growth in the economy will be more dependent on exports.
Manufacturing will be key to delivering export-led growth. It already accounts for nearly half of allUKexports, and the vast majority of manufacturers are already experienced exporters. 90% of manufacturers already export and for 40% exports accounted for over half of their turnover. But growing exports is not likely to be easy.
TheUK’s traditional export partners will be suffering from the same weaknesses in government and consumer spending that are likely to drag down demand at home. Nowhere is this more true than in the Eurozone, which receives around half of all UK exports.
Outside of the Eurozone there are better opportunities. In the past decade manufacturers have looked to increase their exposure to new markets, particularly the fast-growing emerging economies. This means that theUK’s manufacturers are increasingly well-placed to take advantage of growth opportunities outside of traditional markets.
This is illustrated by the significant growth in goods exports to emerging markets that theUKhas seen in the past couple of years. Goods exports to BRIC economies have risen by around 50% since the recession ended, and exports to non-EU countries hit a record level in October 2011.
Our recent survey of manufacturing executives suggests this should continue. Nearly half of those surveyed said that increasing demand for products in emerging markets will be an area of growth for them in the year ahead. And it’s not just products that manufacturers are selling to new markets as just under a half of firms said that they see increasing demand for services around their products as an area for growth.
However, growing exports will not be easy, especially as global growth is forecast to be weaker this year than last. It already seems likely that the Eurozone will fall back into recession and if the crisis in the area escalates this will further dampen demand for exports around the world.
2012 is likely to be a challenging year for manufacturers, and exporters in particular. With this in mind, EEF will be hosting a workshop on exports at our National Manufacturing Conference. As well as hearing from an impressive line-up of manufacturing leaders and politicians, delegates will be free to choose from a choice of best practice workshops in the afternoon, one of which will focus on ‘Manufacturing Growth Through Exports’.
Through a combination of case studies and expert advice this session will provide practical help for manufacturers who are new to exporting or keen to break into new markets. The session will also identify the various mechanisms and funding pots available to UK manufacturers.
With growth for many companies dependent on exports this year, this workshop promises to be lively and informative.
