Food & beverage UK’s fastest growing export sector, says researchIosif Galanakis
New research suggests that the food and beverage sector is the UK’s fastest growing export industry. Exports are expected to grow at 6.3 per cent a year to 2021, ahead of the aerospace, precious metals, automotive and pharmaceuticals sectors.
Food and beverage exports were worth USbn in 2017 and the projected growth could generate an extra USbn a year for the industry’s exports.
Exports of the five fastest growing sectors were worth USbn last year. The projected growth means that these sectors could generate an extra USbn a year for UK exports to 2021.
The research, commissioned by Wyelands Bank, aimed to better understand the role of imports and exports in the UK economy. It was prepared in collaboration with Global Trade Review, the leading trade and trade finance media company, and Coriolis Technologies, the trade data company, which has provided the information.
The food and beverage sector is vital to the country’s economy and is the UK’s sixth largest export sector. What’s more, the UK is the second largest food and beverage exporter globally after the US.
Food and drink manufacturing businesses accounted for bn in turnover and created more than 800,000 direct jobs in 2017.
The UK food and drink sector is highly domestic in focus with exports only accounting for 9% of the total production within the industry.
In addition, the UK imports an estimated 48% of the food and drink it consumes. Imports in 2017 were worth just over bn giving the UK a deficit of just under bn. The UK is the second largest importer of food and beverage by value – second again to the US.
Iain Hunter, CEO of Wyelands Bank, said: “Food and beverage businesses are important to the UK economy and the industry is a significant source of export growth over the next five years. What’s more, we can see how important SMEs are to UK trade, given SMEs account for more than half of the businesses in the food and beverage industry.
“Smaller, more innovative companies – especially in manufacturing – play an important part in the UK’s foothold in global supply chains, as these food and drinks businesses demonstrate.”
More widely, trade accounts for 58% of UK GDP. This makes the UK economy one of the most open in the G20, and more open than China, America and Japan. In 2016, the UK exported goods worth USbn and imported goods worth USbn.
Growth in Asia Pacific and South America
Looking at the regional picture for UK exports, Europe remains the UK’s biggest trading partner for exports with a 46.3% share. North America is next with 17.2%, while Asia Pacific (7%), Sub-Saharan Africa (5.4%), Mena (1.8%) and South America (1.2%) follow.
However, the fastest growing markets are Asia Pacific, where exports are expected to grow at 3% a year to 2021 and South America, where UK exports are expected to grow by around 0.5% annually until 2021.
Iain Hunter, CEO of Wyelands Bank, added: “Trade is important because it has helped contribute to the UK’s record employment levels, providing financial security for millions of families up and down the country.
“However, in order for businesses to succeed, they need working capital. It is only by providing better access to funding that we can support businesses to trade, grow and create jobs.”
The analysis is based on the trends and patterns in trade flows which it projects forward. It does not account for potential political or policy changes.