Sales of British manufactured goods to add £26.5bn to the region's economy - Barclays

UK manufacturing exports will bring in around £26.5bn to the West Midlands economy this year, according to a new study from Barclays Corporate Banking.

Barclays ' new report - The Export Dividend - shows that, despite widespread supply chain disruption and challenges brought on by the global pandemic and the UK 's exit from the EU, 76 per cent of manufacturing firms with 10 or more employees in the West Midlands are currently exporting.

Across the UK, British food and drink producers are reaping the highest financial rewards, with £34.3bn in sales on a global scale. They are followed by automotive manufacturers, with £20.9bn.

On a national scale, exporters are also shown to have fared better this year than non-exporters. Over a quarter (26 per cent) of the research respondents who sell overseas said they had seen 'significant growth ' in 2021, only 18 per cent of non-exporters said the same.

Meanwhile, manufacturers who export are also more confident about their prospects in 2022 with 88 per cent of exporting businesses upbeat about their growth prospects, compared to 71 per cent of those who don 't currently export.

Among those who don 't yet export, there is significant demand to start doing so with over half (58 per cent) in the West Midlands aiming to start selling overseas in 2022. If they do, Barclays ' economic modelling predicts it could be worth an additional £182m to the local economy next year, and an additional £1.5bn per year by 2030.

Non-exporters are more likely to favour European markets, with 30 per cent saying they would target Germany initially, followed by The Netherlands (24 per cent) and the US (24 per cent). In contrast, the US is the market that most current exporters (30 per cent) sell to, followed by Germany (26 per cent) and France (26 per cent).

The new findings coincide with the Government 's refreshed export strategy, 'Made in the UK, Sold to the World ', which was published in November. Barclays ' research shows that knowledge gaps will need to be narrowed to fulfil its ambitions.

As it stands, far from all manufacturers in the West Midlands are aware of current or emerging initiatives to encourage international trade, such as the UK 's bid to join the Trans-Pacific Partnership (46 per cent) and the recently signed free trade agreements with Japan (42 per cent) and Australia (46 per cent).

Meanwhile, only around four in ten (42 per cent) were aware of the plans to create eight new freeports in England, which offer tax breaks for manufacturers on the import of materials. However, those familiar with freeports were very positive about the scheme with 62 per cent saying they plan to make use of them once they come online.

Richard Craven, manufacturing industry director, Barclays Corporate Banking said: “The British manufacturing sector, like many others, has endured a tough year and around a third of our research respondents have been impacted by higher labour costs, higher material costs and other supply chain issues.

“However, exporters, more than most, have weathered the storms and are enjoying strong demand for their products in markets all around the world. Confidence is high and many firms are looking to exports to fulfil their growth ambitions next year and beyond. ”