The West Midlands is emerging as an exporting powerhouse with forecast growth of more than 8.1% driven by significant gains in engineering – shows a new study.
EY’s UK Goods Export Monitor, which tracks international export data by region, sector and trade routes over the next five years, shows that engineering industries are anticipated to lead growth in UK goods exports into new trade corridors, with a focus on high-end, specialist products.
“While the UK services sector remains the principle engine of recovery, goods – which account for nearly half of all UK exports – still make a vital contribution to the economy,” said Steve Varley, chairman and UK & Ireland managing partner at EY.
But whilst engineering is anticipated to drive growth across the whole of the UK, the study found significant regional variance, with the West Midlands emerging as an engineering export powerhouse.
The area is on track to grow goods exports faster than any other UK region by selling high-end engineering far outside Europe, with annualised growth in engineering goods exports of almost 5%, worth £6.9 billion in 2017, compared with £5.5 billion in 2012.
“Although the Midlands region remains behind London and the South East for total value of UK goods exports, it is the biggest regional winner by speed of growth, commented Sara Fowler, Midlands’ senior partner at EY.
“Over the last 15 years the region’s goods exporters have invested in competing at the niche manufacturing end of the engineering sectors and this is now paying dividends,” she added.
The study shows engineering at the core of UK goods export growth over the next five years – but EY warns that sector-specific strategies are needed across the industry to help meet the demands of some of the world’s fastest growing economies.
“Some real sweet spots of demand for UK products are emerging for engineering to Hong Kong, Saudi Arabia and Poland. With UK regions like the West Midlands well positioned to benefit from this,” Gregory adds.
“But rather than take a blanket approach to export strategy, companies and policy makers need to examine trade at a corridor level based on where our biggest growth sectors can reap the greatest rewards,” he concludes.