I have been away – from blogging for over a year (last post here) from work just over 3 weeks (enjoying the not at all grim north). Now I’m back and still running to catch-up I haven’t listened to the latest of Deloitte’s Brexit webcasts but, before my 3 weeks away I listened to Deloitte UK’s Chief Economist, Ian Stewart, musing about comparisons with the present situation and offering his view that Brexit will deliver a “common or garden recession” with the real question being the shadow it casts over long term growth; he doesn’t speculate about this.
I found the first half of his view reassuring and remembered some research by ING, Brexit Half way there. Page 11 is also reassuring as it highlights that by 2016 we had already begun to trade more with the rest of the world than the EU compared with 2006. Given UK GDP is still far off where its pre-crash growth trend predicted I felt less reassured than curious about what’s being exported and to where.
Helpfully, included in the data the Office of National Statistics provides is export data both by commodity and service as well as country. I only manged to go back to 2011, not 2006 and looked at commodities not services. Findings, at country level, are:
- Unsurprisingly the US was the UK’s biggest non-EU export market, China, The UAE, Switzerland and Hong Kong, in that order, complete the top 5.
- Germany, France, The Netherlands and The Republic of Ireland all receive more exports from the UK than China
- Italy, Belgium and Spain all receive more exports from the UK than UAE.
Commodity level export highlights to non-EU are:
- The “machinery and transport” commodity category which is top 5 for the top 5 countries; it is also the top category to both the US and China.
- The category which increased most to the US was “Road vehicles” – up 57%. In absolute terms the UK exports more “Road vehicles” to China than the US
- – no wonder everyone’s worried about the UK motor industry.
- A surprise was that “Jewellery” and “Works of Art” were even categories, but not only that they both made the top 10 to Switzerland and UAE in 2016.
Interesting though I found slicing and dicing the data time is short and courtesy of Dr Ian Archer and Gresham College I stumbled on a sort of Brexit comparison, one which Ian Stewart would probably exclude from a Deloitte Brexit Briefing, for many reasons, not least because it’s from the 16th century. In 1569 England ditched Antwerp – largely due to having been kicked out. Antwerp was a key trading hub, especially for the cloth which accounted for 66% of all of England’s exports by 1558 and the quest to find any other willing traders wasn’t all plain sailing. And sailing, was of course, exactly what was needed to find new people do to business with in the mid 16th century.
However, in 2019 sailing’s just one option. Instead, you might want to consider joining a digital market place; as it happens I work for the world’s largest B2B network, Ariba Network where millions of buyers and suppliers operating in 190 countries trade $2.3 trillion in goods and services each year. For context: the GDP of France, the world’s 7th biggest economy by that measure is $2.6 trillion, while the world’s 8th biggest economy by GDP is Brazil with $2.1 trillion. Ariba Network, is somewhere between the size of France and Brazil – maybe being part of such an ecosystem might help mitigate that “common or garden” recession on the horizon.