Now emerging from the throes of the pandemic, most nations and regions in the UK have seen an improvement in their average business confidence compared to Make UK and BDO’s Regional Manufacturing Outlook 2020. Despite recovery now being underway, the speed at which this occurs between UK nations and regions has, and will, vary. In most instances, this variation will be dependent on which manufacturing subsectors are dominant in given areas.
Five English regions together with Wales saw their percentage of exports going to the EU fall. In two regions the share stayed the same and only the West Midlands and Scotland saw exports to the EU increase slightly (1).
This shows that the political uncertainty caused by leaving the EU was beginning to be felt even before the actual departure and the signing of the trade deal at the end of last year. Whilst acknowledging the trade picture with the EU has improved recently, trade data shows exports to the EU in Q1 2021 were still 27% below Q1 2019.
It is vital that Government works with business and the EU to smooth out critical issues such as customs procedures. Otherwise there is a risk that the drop in exports to the bloc we have seen over the last couple of years will become structural and permanent.
Stephen Phipson
Chief Executive, Make UK
While we’ve seen some promising signs of recovery in the latest quarterly figures, the dent to UK exports going to the EU is hardly surprising.
Manufacturers still need support from qualified and experienced customs experts. The introduction of new customs procedures with the EU, in addition to the pressures on the logistics sector and their supply chains, create further layers of complexity for manufacturers up and down the country.
Richard Austin
Head of Manufacturing, BDO
(1) Exports to the EU as a % share of total exports in the following regions/nations for 2020 compared to 2019
