The Northwest looks overseas for growth

Economists agree that the UK's recovery will be driven by exports, and as a key manufacturing base, the Northwest has a key role to play.

The region, a hotbed for the aerospace, automotive, chemical and pharmaceutical sectors is responsible for around 10% of the UK's total export output.

Statistics from HMRC for the first nine months of 2009 reveal that total exports from the region were worth £17.6bn.

Of this total the lion's share came from the chemical sector - £9.9bn and from machinery and transport £3.1bn. In total there were 6,350 Northwest companies exporting.

Despite the downturn last year, recent figures from Nat West bank showed an encouraging trend - the value of exports by companies in the region rose by 14% or £776m between the second and third quarters of 2009.

In addition, the average value of goods sold abroad per exporter in the Northwest increased by 21% to £1.4m in the same timescale.

While the key driver of this growth will have been the weakness of Sterling - making it much more attractive for foreign companies to buy from UK companies - the region is clearly doing something right.

But, there's room for improvement - much of our exports are to the Euro-zone and the US, and with the balance of economic power forecast to shift from West to East in the next 20 years, more has to be done to improve trade with China and India.

Professor Peter Spencer, chief economist of Ernst & Young's ITEM club think tank said in January: "The UK’s recovery is reliant on a roaring trade with the tiger economies.
After a decade of relying on the domestic consumer, companies have to start chasing overseas customers.”

He said growth in the economy will depend on UK exporters taking advantage of the global upturn. With world trade forecast to grow 8% this year, the ITEM club predicts UK export growth will hit 9% in 2011 and 10% in 2012.

Mike Eccleshall, deputy regional director of UK Trade and Investment in the Northwest says there has never been a better time to look at developing international business.
"The pound continues to be competitive against major currencies and the UK is now officially out of recession and these are two reasons why now is a really good time to be looking overseas.

"Britain is a relatively small market in its own right and clearly there is a huge opportunity beyond that for companies to take advantage of."

Mr Eccleshall said the most important piece of advice he would give any company looking at exporting for the first time is: "Do your homework,"

He explains; "A lot of this is common sense, but the key thing is not to rush into anything - that's the biggest risk.

"Take advice - there's plenty out there and it's free. Do plenty of research into assessing demand and of course the competition.

As the agency charged with helping British companies develop overseas business, UK Trade and Investment should be high on firms' agenda as a first port of call for advice, be it on local customs in foreign companies, tax rules or regulation.

The website, www.uktradeinvest.gov.uk contains a checklist for companies planning their first steps overseas.

In the Northwest UKTI has a team of more than 40 advisers to help businesses from the region enter and develop overseas trade. In the region UKTI acts as the trade arm of the Northwest Regional Development Agency and operates a 'Dual Key' agreement under which the NWDA provides additional funding and joint working to strengthen and support the range of services provided across key sectors.

This partnership approach has had some major success in recent years, as the Northwest has risen up the UK export league table.

Mike Eccleshall says: "International trade is extremely important for the region's economy, and the Northwest is the second highest after the South East in terms of exports. We have made quite significant improvements in this regard - a few years ago we were in seventh or eighth place. Full year figures for 2009 are not available yet, but in 2008 export values from the region were £23bn.

"We're not complacent and there is clearly scope for more. Historically the three biggest markets for Northwest companies have been and remain the US, France and Germany and there are new developing markets to be exploited."

Despite the understandable interest in China and India - China is expected in the next 30 years to have replaced the US as the world's biggest economy - Mr Eccleshall says these markets are not best suited to first-time exporters.

"There are complexities with both markets, most new exporters start in markets where access is easier in terms of language or geography - for instance the budget airlines have made continental Europe far more accessible than before."

Nearly 2,000 Northwest firms have gone through UKTI's Passport to Export scheme, which is specifically designed to hold the hands of first-time exporters through the process.

One such business is Stockport-based small business Beaumont Organic, which is enjoying success in Japan.

Founded by designer Hannah Beaumont three years ago the ethical fashion business received help in devising an export business plan, while funding was also provided to enable Hannah to travel to Japan. So successful has she been that Hannah is now working with UKTI to develop trade links in Sweden and Denmark.

Another, larger textile company which has enjoyed international success is Burnley company Panaz, which now trades with 40 countries worldwide and has export sales of £40m and a base in the US.

Founder Tony Attard says vision, courage and patience are key virtues: "It takes a lot of time, effort and strategic thinking, but if you do it, then you can create a global brand that can help you in difficult times. It's not an exclusive world."

For more on Tony and Panaz's story, see our Case Studies section.

For further information on UK Trade & Investment services, contact the Northwest International Trade Team. Tel: 0845 603 7053. E-mail: info@uktinorthwest.co.uk