In a fast-changing world the truth is the global race has been underway for some time.
The past half-decade ought to have been the best of times for UK exporters. After all, in the immediate aftermath of the financial crisis sterling dropped in value by over twenty percent against the currencies of both our biggest export markets. The pound’s fall against the US dollar (nearer 30 per cent) and the Euro happened when consumption remained relatively high.
Since the financial crash our floating currency has remained remarkably stable against these competitor currencies, the slight gains in 2009-12 only being cancelled out by downward movement in recent months. Worryingly, however, despite the devaluation UK companies appear to have missed this opportunity to boost export sales and the UK’s healthy surplus in services exports continues to be undermined by a stubbornly high goods deficit.
The government’s avowed strategy of rebalancing the economy towards trade and manufacturing, where the UK is currently the eleventh largest goods exporter worldwide (in 1990 the UK stood proudly in fifth place), and away from financial and professional services where we rank at number two, is part of the issue.
It is unrealistic to expect a speedy turnaround of our trading fortunes in emerging markets, but the marketing of UK manufactured goods and services abroad needs to be reinvigorated before the UK economy can claim an export renaissance. We still have a great deal to offer, not least as the goods we do manufacture have a reputation for quality.
But our exports need to be far wider and deeper than professional services and high end goods if we are to close the gaping British trade deficit.