The Institute of Directors has said that despite trade flat-lining in 2015, according to official figures released this morning, there are tentative signs that UK firms are tapping into new markets and the services sector continues to perform strongly.
Allie Renison, Head of Trade Policy at the IoD, said:
“The total value of trade, and the UK’s stubborn trade deficit, remained broadly flat last year. This is unsurprising given the sharp fall in the price of oil, which knocked British exports and made imports a little cheaper for British customers. Since the fall in the oil price should still be a net win for the UK economy, we should not be disproportionately concerned about the adverse effect this has on areas like our trade balance.
“Nevertheless, we cannot write off concerns about Britain’s export performance over the longer-term. Meeting the government’s ambitious target of £1 trillion worth of overseas sales by 2020 will be a monumental challenge.
“Encouragingly, there are some silver linings to these stormy clouds. British firms appear finally to have started to seize more exotic trade opportunities. Despite the global slowdown, our trade deficit with non-EU markets is at its lowest level in a decade – narrowing by more than half over the course of last year. As growth remains elusive across much of Europe, the fact UK firms are looking further afield underscores how important it is that the EU pursues an ambitious trade policy with the rest of the world.
“These figures prove, once again, that it is Britain’s dominant services sector that will power export growth over the next few years. Our world-leading financial services, professional firms, creative industries and tourism industry are punching above their weight on the global stage. It is their success in tapping into growing markets and fledgling middle classes in countries like China and India that will underscore the health of Britain’s economy in years to come.”