TM's James Pozzi discusses the week’s big manufacturing issues including Russia's ban on imports, the performance of UK exporters and the British space industry's role in the Rosetta project.
Russian import ban a reminder of the damaging effects of global uncertainty
This week served as a reminder of the indirect influence global conflicts and frictions can have on the UK economy. With manufacturers saying this week that they remain concerned over the potentially damaging effects of the Gaza conflict and the continuing fallout from the MHX17 plane crash, Thursday saw Russia announce a ban on certain foods from Western countries entering its borders. This is in retaliation to sanctions placed on the country, and now items such as fruit, meat and dairy from the EU nations, the USA, Canada, Australia and Canada will be denied access into the country. Whether this is to UK firms looking to maximise the potential of the R in BRIC.
Russia is seen by some manufacturers as one of the trickier global giants to export into, and yet, 2013 saw around 5,800 UK firms export into Russia, which boasts the second largest food & drink market in Europe. Whatever the future intentions of Mr Putin, the UK government will surely be hoping for some kind of compromise. And sharpish. While the UK is considerably behind the likes of Poland and the Netherlands in Europe in terms of Russian exports, it still sends £17m of frozen fish, and over £5m in cheese and coffee. That’s still some sizeable orders in jeopardy for UK firms.
Some thoughts on UK exports…
Analysis from Santander of data by the Office for National Statistics this week revealed the UK’s strongest export markets. The three C’s: cars, clothing and cleaning materials did particularly well, with the garment industry rising by 16% in 2013 to year-on-year value of £5.2bn. To me, the most intriguing piece of information was the fact the UK beverages industry now out does the steel and plastics sectors, two traditional staples of UK industry. Valued at £7bn annually, it tells just half the story of the UK’s ever-growing food and drink sector. The continued rise of the beverage industry – from the Scotch whisky distilleries of Scotland to Coca-Cola’s gigantic Wakefield factory – shows the virtues of the UK as Europe’s number one inward investment location. Given the form in recent years, I predict the UK will see more overseas investment in the beverage market in the coming years.
Rosetta excitement shines light on strong UK space industry
When examining the 60 years of man exploring space, the influence of the UK rarely features in any of the retrospectives, which are mostly dominated by the USA and Soviet-era Russia. One of the most unfavourable events that sticks in the recent consciousness was the UK’s involvement in the ill-fated Beagle 2 landing in the early part of the millennium, which was somewhat mocked for its lack of end result. But events like the Beagle project with its disappointing outcome didn’t do the UK and European space industries justice. The reality of the UK’s £9bn industry is that of a highly advanced, innovative sector continuing to grow year-on-year. This week, the British influence on the Rosetta probe – which aligned with a comet it’d been chasing for over a decade – was brought to wider attention. Gratifyingly, the input from the UK’s space companies on the European Space Agency project also came under scrutiny.
The probe was designed and partly constructed in the UK, with no fewer than nine companies working on the project. With the sector estimated to grow another 7.5% for this year, the UK space industry looks set to continue reaching new heights. Considering this in relation to the skills gap, projects like Rosetta are ideal ways to inspire new generations of engineers. While the motorsports and automotive sectors take seemingly the lion’s share of attention, it’s a cert there’s plenty of eager young minds out there who could capitalise on the nearing reality of space travel, and the increase of UK involvement in intergalactic projects. I’ll be keeping a close eye on any future engagement.