One of the few silver linings of the economic turbulence of the eighteen months, at least for manufacturers, has been the decline of the pound relative to other major currencies such as the dollar and the euro.In theory, this should have made our goods more competitive in overseas markets as we would be able to compete with other countries on price as well as quality.
Unfortunately for UK PLC, this has not been the case.
An analysis of recently released government statistics on our overseas trading performance shows that the value of exports has plunged by an incredible £24.4 billion in 2009 as compared to the previous year, an overall decline of 10 per cent.
The trade with Europe – which is half of the exporting trade of the UK – accounted for three quarters of the decline in overall UK export performance, a fall of £17.5 billion between 2008 and 2009. The second biggest market, the USA, which accounted for 17 per cent of the UK export market in 2009, saw a drop of 4 per cent during the same period.
In terms of sectors, the dependency of the UK on a few key sectors exacerbated the decline in export performance.
For example, three sectors – metals, energy and automotive, accounted for 36 per cent of the UK export market in 2008, yet by 2009, this had fallen to 30 per cent, a decline of £23 billion pounds or 78 per cent reduction in one year in export performance.
However, there were some sectors that, despite the recession, did improve their export performance between 2008 and 2009. These include biotechnology and pharmaceuticals (18 per cent growth) and telecommunications (11 per cent growth). Yet these two high technology sectors account for only a tenth of the exports produced by the UK in 2009.
There seems to have been no imperative whatsoever by the UK Government in supporting our exporting industries to get their goods and services out to the marketplace. One can only hope that the next government will as reversing this downward trend could be the salvation for the UK economy.
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