The headline statistic revealed by the 'The Cole Commission on Exports' is that the UK is set to miss this £1 trillion target by around £350 billion.
Led by Graham Cole, AgustaWestland chairman, the 64-page report was commissioned by Labour prior to the election and, following its publication, Shadow Business Secretary Chuka Umunna is quoted by www.expressandstar.com as saying: "Ministers said they'd double exports to £1 trillion and get 100,000 more firms exporting overseas by 2020, but government scheme after government scheme has failed to make a difference and Britain now has a record current account deficit."
This trade deficit mention is interesting. References to the 2020 export target seem previously to have been made in isolation, but the truth is imports will rise with exports. Automotive, the UK's current export success story, sees only a third of a UK-built car's components sourced in the UK; it was more than 90% in the mid-1970s.
The Cole report also links the trade deficit with exports: "The UK, suffering from a chronic trade deficit, needs to raise its export game significantly, if it is to ensure prosperity." But the ability to hit both targets at the same time is surely questionable.
Of course, reshoring initiatives underway for the automotive sector and the wider manufacturing economy will reduce imports. For automotive, this reshoring potential has already been spelt out; £4 billion worth of business a year, according to industry body SMMT. But progress even on achieving this small figure appears slow, which, at a cursory glance, it shouldn't be. "At present, about 80% of all component types required for vehicle assembly operations can be procured by UK suppliers," says SMMT, while it adds that we have 16 of the world's top 20 automotive suppliers in the UK.
It makes that £500 billion export increase in the six years to 2020, with SMEs to the fore, seem challenging and the resulting trade deficit position uncertain. So well done engineering firms Acro Aircraft Seating, Group Rhodes, Proseal, X-Cel Superturn and more, all featured in The Sunday Times 2015 SME Export Track 100. Carry on exporting; we need more companies like you.
This article was first published in the July 2015 issue of Machinery magazine.
