Scotland and Northern Ireland outperform rest of UK in EU exports

Scotland and Northern Ireland Outperform Rest of UK in European Union Exports

Scottish and Northern Irish manufacturers have defied expectations and seen an increase in their exports to the European Union (EU), despite concerns over Brexit's impact on trade. According to recent data released by manufacturing lobby group Make UK and accountants BDO, EU customers accounted for 52% of trade last year, up from 50% in 2019. This surprising increase can be attributed to a rise in exports from Scotland and the positive impact of the Northern Ireland Protocol.

Drivers behind Scottish Export Growth

One of the main drivers behind the increase in Scottish exports to the EU is the country's oil and gas industry. The ongoing energy crisis has led to a surge in demand for oil and gas industry equipment, making previously written-off exploration projects viable again. This increase in demand has resulted in a boost to Scotland's exports to the EU. Additionally, the ongoing Ukraine crisis has also played a role in Scotland's export growth. The Make UK report highlights that the oil and gas sector and its supply chains have further bolstered Scotland's exports to the EU during this period.

Positive Impact of the Northern Ireland Protocol

Northern Ireland, benefiting from the Northern Ireland Protocol, has also maintained access to the EU's single market for goods while freely trading goods into the rest of Great Britain.

Decline in English and Welsh Exports to the EU

In contrast to Scotland and Northern Ireland, the majority of English regions and Wales have experienced a decline in their share of exports to the EU. Make UK's analysis of official data shows that between 2020 and 2022, only Scotland and Northern Ireland saw an increase in their share of exports to the EU. This decline in English and Welsh exports to the EU can be attributed to a structural shift in the UK's trade patterns. Factories in north-west England and the West Midlands, which had previously established strong connections with firms in the EU, have been particularly affected. However, the overall share of UK manufacturing exports to the EU has increased slightly, from 50% in 2019 to 52% in 2022. This increase is largely attributed to the Northern Ireland Protocol and the rise in the value of Scottish oil and gas exports following the Ukraine crisis.

Conclusion

In conclusion, the latest data presents a mixed picture for British manufacturers in terms of their exports to the EU. While Scottish and Northern Irish exports have increased, English and Welsh regions have seen a decline in their share of exports to the bloc. The unique positions of Scotland and Northern Ireland, driven by the oil and gas industry and the Northern Ireland Protocol respectively, have played a significant role in their export growth. However, it is important for the UK government to support exporters and explore opportunities in other markets as the country looks to forge new trade relationships outside of the EU.