Premium products defy UK export slide
British-made luxury goods, sports and leisure equipment and homeware exports grew consistently during the first three quarters of 2019, outstripping the performance of overall UK manufacturing exports which fell.
The trend was driven by resilient consumer confidence in key export markets in Europe, North America and the Middle East.
The Lloyds Bank International Trade Index, based on data from Lloyds Bank Commercial Bank in partnership with IHS Markit, is a quarterly report that brings together export growth and supply chain indicators to provide insight on conditions for UK exporters.
For July to September, the Index measured a reading of 46.5 for new manufacturing export orders, down from 46.9 in the second quarter and the lowest for almost seven years (Q2 2012). A reading of above 50 indicates growth, while one below 50 signifies contraction.
However, exports of other manufacturing* goods – including luxury items such as jewellery, sports and leisure equipment and homeware – bucked the trend, posting an Index reading of 52.3 in Q3.
This follows readings of 53.2 and 51.5 in the first two quarters respectively, making other manufacturing the only manufacturing export category measured by the Index to have new order growth throughout the year to date. Alongside pharmaceuticals, it was the only manufacturing category to grow during Q3.
Accounting for the findings, separate research from IHS Markit revealed that between July and September consumer spending rose in six of the top ten overseas markets for exports such as sports gear and jewellery – France, Germany, Ireland, the US, the UAE and Saudi Arabia – propping up demand for some the UK’s most loved brands.
Lloyds Bank’s research follows a recent report from trade body Walpole that found the UK’s luxury goods exports reached £38 billion in 2017, compared to £25 billion in 2013.
Gwynne Master, managing director and global head of trade for Lloyds Bank Global Transaction Banking, said: “This year manufacturing exports have suffered as a result of international trade tensions and a slowdown in global economic growth, so it’s encouraging to see the pull of Brand Britain driving overseas sales of premium goods.
“Manufacturers of these products have benefitted from favourable sterling exchange rates and a reputation for quality associated with UK exports. Robust consumer confidence in key overseas markets has also translated into consistent new order growth.
“Exporters are, however, operating in a challenging environment, and we will continue to be by the side of firms seeking to seize opportunities abroad – whether that’s by providing insight to identify the best markets for products and services, or through specialist finance to help them prosper in international markets.”