Bosses warn on cost of no deal Brexit as study shows value of trade between UK and EU is twice the size of that with USA

Seven of the UK’s top export destinations currently lie within the EU with exports to the top markets within the bloc currently amounting to £236.5bn.

However exports to the United States currently runs at a value of £118.2bn.

Broken down by sector the export picture of manufactured goods is dominated by transport (25.5 per cent) and the pharmaceuticals and chemicals market (17.9 per cent).

The importance of the top two dominant exporting sectors is also reflected in contributions to business R&D where pharmaceuticals and chemicals and the transport sector accounted for almost 70 per cent of the total spend between them.

The transport sector also led the way in export growth increasing by 7.4 per cent, largely on the back of continued growth in aerospace, closely followed by food and drink which increased exports by 5.3 per cent.

Seamus Nevin, chief economist at Make UK, said: “These figures lay bare the overwhelming importance for manufacturers of trade with our closest market and the need to avoid imposing any barriers which will make this more difficult.

“Whilst the United States remains the biggest market and, presents significant opportunities for export growth, it is a fallacy to believe that geography is not the biggest factor driving trade.

For UK manufacturers access to their biggest market must be a premium.

“The figures also provide an important reminder that we’re still one of the top ten biggest manufacturing nations and we want to see policy makers working with industry to help move UK manufacturing up the rankings.”

The analysis by Make UK and Santander shows that manufacturing remains central to the success of the economy overall, accounting for two thirds of overall R&D, 45 per cent of exports, 15 per cent of business investment and 2.7 million high value jobs which are better paid than the economic average.

The analysis also shows that the average salary in manufacturing is £33,592, compared to £29,832 for the whole economy and above services at £29,014.

By sector size, Food and Drink remains the single biggest sector contributing 15.1 per cent of GVA worth roughly £73.1 billion, closely followed by transport (14.9% worth £72.1bn) and pharmaceuticals and chemicals (14.2% worth £68.7bn).

By Region the North West is the biggest single by output, worth £28.5bn, closely followed by London and the South East worth £28.1bn.

Paul Brooks, UK head of manufacturing, Santander, said: “The UK has always punched well above its weight when it comes to exports and it’s vital this trend continues – jobs across the UK count on it.

“The message from manufacturers is clear: Europe must remain a strong trade ally.

“We will continue to support the UK to hold its position as a major global economy and exporter.”