A new report from the Centre of Economic Performance issued in June 2024 provides some key analysis of UK Trade after Brexit.
The report, overall, shows that exports and imports of goods have shrunk by 1% and 2% respectively since 2016, and when looking at UK’s exports to the EU, these have also been impacted by seeing an overall decline – specially for small firms, and, according to HMRC data, it seems that since 2019 the number of firms exporting to the EU fell from 120,000 to 100,000 in 2023, and such decline was primarily experienced by small firms with fewer than 10 employees.
Empirical evidence from the Chamber, we know many of our members - specially SMES – found it difficult to adapt to the new regulations and burdensome paperwork. In the North West, according to the latest Regional Trade Statistics, between 2019 and 2023, the number of companies exporting goods to EU countries declined by 13% whilst to the Rest of the World (RoW) it increased a modest 1%. When looking at the number of importers, the region registered a decline of 1% to the EU and an increase of 11% to RoW, in line with the national findings on this report.
Whilst research has no evidence that the exports to the rest of the world have been affected by the TCA, which contrasts the evidence for UK’s Imports, which indicates that TCA has indeed driven UK companies to expand their supply chain outside the EU.
Also worth noting, the report says evidence suggests that the TCA has had a smaller effect on services than it has had on goods trade, but also outlines that more research is needed on this area.
The report also highlights how new trade agreement with third countries is not compensating the loss of trade with the EU’s single market, which will always present the greatest opportunities for growth for UK companies due to its proximity and simply being one of the largest economic and consumer markets in the world.
Whilst trade in goods shows definite evidence of deterioration with the EU since Brexit, recent UNTACD stats positioned the UK as the 4th largest exporter in the world, thanks primarily to the rise of export of services. Whilst this is an achievement considering the turbulent times and challenges UK firms have had to face in the past 5 years, it is important not to forget the importance that trade of goods has in our overall trade balance.
Not everything is gloomy though and companies across the UK have shown a great deal of resilience. In our recent QES for Q2-2024, GM businesses generally reported seeing an upward trend in both goods and services in Q2 compared to Q1, although companies located in GM South were the only ones seeing a small decline in export sales in Q2 compared to North and Central.
Are you a SME in GM who has experience a downward trend in trade since Brexit with EU and/or Non-EU countries?
We are currently conducting a survey to help us understand how business in GM and beyond are doing in terms of their export and import to EU and Non-EU countries. Help us gather your views so we can influence future policy and support for your business.
If you would like to share your experience and have a more in-depth conversation with us, please email our Head of International Trade at Susana.cordoba@gmchamber.co.uk
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