Why Exports Matter

Mark Sandford February 2010
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It is not realised in this country that exports do play a crucial role in maintaining the nations' prosperity and hundreds of thousands of jobs across the nation depend on the UK's success or otherwise in penetrating overseas markets. Indeed the nation's goods trade gap narrowed to 7.4 billion in May 2010 as per this reference http://www.telegraph.co.uk/finance/economics/7936903/Rising-UK-exports-narrow-trade-deficit.html If we desire to create moree sustainable jobs in the long term, no-one can ignore the fact that this will only be achieved by generating added value particularly in the manufacturing sector. Indeed several firms have recently won huge export orders notably Rolls Royce but also Babcock Appledore based in North Devon. Rolls Royce have just grabbed two major contracts to supply the Trent engine to Chinese airlines, the latest order from Air China being worth 1.8 billion. This also demonstrates the recovery in civil aviation that is now steadily continuing after the worst of the recession. The Trent engine has become a major export earner for this country and also powers the latest Airbus airliner, the A380 superjumbo. Babcock Appledore also secured a 95 million contract from the Irish Naval Service to supply and support two 9O metre Offshore Patrol Vessels. This is even more remarkable given the fact that the shipyard was fighting to secure its own future several years ago. The company previously known as Appledore Shipbuilders Ltd. . went into receivership in September 2003 after struggling to win new contracts. It had become well known for building a wide variety of vessels such as dredgers, tankers and even passenger ferries. The LNG tanker Deltagas was built by Appledore Shipbuilders in 1992 and now sails under the Antigua and Bermuda flag.

In 2004, Appledore Shipbuilders was taken over by DML, the firm which manages Plymouth's Devonport Dockyard. DML was in turn taken over by Babcock PLC, the engineering firm and the yard is now known as Babcock Appledore. It has just completed the bow block for one of the two aircraft carriers now under construction for the Royal Navy, otherwise known as the Queen Elizabeth Class. The recent contract win from Ireland proves what can be achieved when a shipyard is run on a commercial footing by a larger company such as Babcock PLC.

The government cannot expect future growth to be sustained by consumer spending alone. Indeed its own body, the ONS, stated very recently that average spending by families on goods and services had declined in 2009. This has occurred no doubt not just due to the recession but also to the fact that everyone tightens their belt particularly over fears of redundancy. Too many people are worried about what might happen to their job, not right now but tomorrow as well.

It should also be recognised that vital high technology skills are sustained in this country by exports, notably in aerospace but also in the motor industry too. Indeed the UK motor industry now exports over half its annual production abroad, which would have been unheard of decades ago in the heady days of British Leyland. If this skill base was ever lost, it would take a monumental effort to recover and the competitiveness of the UK would be horribly compromised as a place to attract inward investment.

We do have an opportunity in the UK to pursue more market share overseas given the low level of Pound Stirling against other currencies such as the Dollar or the Euro. This makes UK manufacturing more competitive versus other countries. This is also one area where the Government could and should be giving a lead, but is not doing so. Britain's manufacturing sector can still thrive and we should be celebrating this fact.

Mark Sandford - Permission granted to freely distribute this article for non-commercial purposes if attributed to Mark Sandford, unedited and copied in full, including this notice.

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