Pro-Brexit regions in Britain more dependent on EU for exports, report finds | Brexit

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Pro-Brexit regions in the UK are becoming increasingly dependent on the EU for their exports of manufactured goods, according to research by trade body Make UK.

The report, based on quarterly manufacturing outlook data measuring performance in production, orders, employment and investment intentions, also found the EU remains the ‘overwhelmingly dominant’ destination for exports. British manufacturers.

Analysis of 2021 data by business consultancy BDO shows that 49% of UK exports go to the 27-nation bloc.

Northern Ireland, which voted against Brexit but has access to the single market through the Northern Ireland Protocol, is most dependent on the EU, with 63% of all exports crossing the border into the Republic of Ireland and the mainland.

Some of the UK regions that voted for Brexit saw the biggest increases in the share of their manufacturing exports to the EU.

For Wales the figure rose from 58% to 60% between 2020 and 2021, the North East of England saw a rise from 56% to 58%, the East Midlands rose from 48% to 51 % and East of England increased by 46%. % to 48%.

Wales is the EU’s second most dependent country for goods exports, followed by North East England and Yorkshire and the Humber.

“Despite talk of global Britain, history shows that geography is still the main determinant of trade,” said Verity Davidge, director of policy at Make UK.

“The EU was always going to remain the main destination for manufacturers who seem [be] become more, not less, dependent on this market as a market,” she added.

The trade body called on the government to recognize the importance of European markets and reinstate the Brexit support fund for small and medium-sized businesses, along with other targeted programs to help manufacturers meet post-Brexit barriers , including customs, export certification. and compliance with standards.

He also urged the government to reach an agreement with the EU on the Northern Ireland protocol and avoid a possible trade war.

Boris Johnson and Liz Truss, who is third favorite to become the new Prime Minister in the Tory leadership race, tabled legislation last month to rip up parts of the protocol, which the EU says could result in the imposition of tariffs on a range of Britons. goods.

The Regional Manufacturing Outlook 2022 report found that manufacturing conditions have improved across all regions and metrics, reflecting a rebound from the pandemic, based on an “above-normal” consumer response to the reopening of the economy.

More recently, the numbers show continued growth in the first half of this year, with more manufacturers expanding between the third quarter of 2021 and the second quarter of 2022.

However, he warns of a potential plateau as supply issues and increases in energy prices put pressure on manufacturing and consumer demand.

“This period [the last year] could be considered as good as possible for manufacturers for some time to come, given how quickly economic conditions are currently weakening in major markets,” the report said.

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The Northeast has emerged as the top performer for manufacturing growth, reflecting demand for pharmaceuticals and chemicals. The report warns that the region could also be vulnerable to a slowdown in performance as it is unlikely to repeat the “explosive growth” seen in the pharmaceutical industry following the pandemic.

The South West recorded the weakest balance for orders and investment intentions, while Wales, home to Airbus and a large agricultural sector, recorded the weakest average performance for sales growth. production and employment.

Wales was also the second most dependent country on the EU market for its exports after Northern Ireland, with 60% of all its goods exported to the EU.

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