in Features

The UKs second fastest growing export sector

Posted 12 October 2018 · Add Comment

Jim Higginbotham, managing director, asset finance, Wyelands Bank, looks at the export potential of the aerospace sector.

The aerospace industry is important to the UK economy.  In 2017, companies in the sector accounted for some £91.7 billion in turnover – or 3.7% of UK GDP. 

Yet what contribution does the sector make to UK imports and exports, how does this compare globally and what does the sector need to succeed?

To help answer these questions, we commissioned research with Global Trade Review, the trade and finance media company, to better understand the role of imports and exports in the UK today.

The research reveals that aerospace exports are expected to grow at 3.7% a year to 2021.  This is slower than food and beverage exports but faster than the precious metals, automotive and pharmaceuticals sectors respectively (see figure one).

The data shows that aerospace exports were worth $21.5bn in 2017 and the projected growth could generate an extra $796m a year for the industry’s exports.

Figure one: the UK’s fastest growing export sectors

Rank (fastest growing)

Sector

Growth rate a year to 2021 (%)

Value in 2017 (US$)

Project growth per year (value US$)

1

Food and beverage

6.3%

$27.2bn

$1.7bn

2

Aerospace

3.7%

$21.5bn

$796m

3

Precious metals

2.3%

$34.3bn

$789m

4

Automotive

1.7%

$54.7bn

$930m

5

Pharmaceuticals

0.8%

$32.9bn

$263m

Total

 

 

$170.6bn

$4.5bn


Meanwhile, exports of the five fastest growing sectors were worth US$170.6bn last year. The projected growth means that these sectors could generate an extra US$4.5 billion a year for UK exports to 2021. 


 
Flying high
Aerospace is important to the UK economy.  Aircraft alone contributed more that £30bn in UK trade and aerospace companies as a whole accounted for nearly a quarter of a million jobs in the UK. 

What’s more, aerospace is already the country’s eighth largest export sector.  The UK sector is also the fourth largest exporter globally after the US, France and Germany where exports are worth $136 billion, $74 billion and $47 billion respectively.

UK aerospace imports were worth $20.1 billion in 2017, giving the UK a moderate trade surplus of $1.4 billion in this sector. 

Looking at the sector in more detail, while the UK exports more large aircraft and helicopters than it imports, the country imports nearly twice the number of aircraft parts than its exports. 

The UK imports significantly more aircraft engines and radar, radio navigational aid and radio remote control apparatus than it exports.   

Looking ahead
The research shows that the sector’s performance in future is closely tied to global geopolitical developments.  With the growing pressure to increase defence spending, demand for aerospace products is likely to grow.

In addition, if the uptick of the global economy continues, civilian air travel is also likely to grow.  This will increase demand across the civilian aerospace sector.

The role of SMEs

Looking at the size of companies in the sector, the data shows that some 52% of businesses in the sector are SMEs.  What’s more, these businesses contribute 30% of sector turnover, making them a vital part of the industry.

Smaller, more innovative companies – especially in manufacturing – play a crucial part in the UK’s foothold in global supply chains, as these aerospace businesses demonstrate.

Yet in order for this sector and the SMEs within it to continue 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.



 

Other Stories
Advertisement
Latest News

Satellite data learning tool brings EO to the next generation

A new UK Space Agency-backed online tool for learning satellite Earth Observation (EO) is now available for trial by higher education institutions.

Operational benefits of freeports in England

The establishment of new freeports in England - expected to be operational by the end of 2021 - offer the prospect of a range of unique business benefits, according to law firm DLA Piper.

Air Charter Scotland unveils second Biggin Hill based Citation M2

Air Charter Scotland has introduced a second Cessna Citation 525 M2, from its newest London Biggin Hill Airport base, coinciding with the first lifting of travel restrictions from 17th May.

Heathrow calls for significant expansion of 'green' list countries

As it reported today that it had lost 6.2 million passengers in April, down 92.1%, compared to pre-pandemic 2019 figures - following over a year of restrictions on non-essential travel - Heathrow called for significant expansion of

Guidance issued to prevent use of vehicles as weapons in terror attacks

New guidance designed to prevent commercial vehicles, including vans, lorries, buses, coaches and even cranes, from being used as weapons in acts of terrorism, was published yesterday.

Cobham Mission Systems wins $7.1m NAVSUP UWARS contract

Cobham Mission Systems announced today that it has been awarded a new $7.1 million prime contract from the US Naval Supply Systems Command Weapon Systems Support (NAVSUP) for production and delivery of Universal Water Activated

DSEI sk1602170921
See us at
RAF Museum BTDSEI bt1602170921Space Comm Expo BT