New research by Aston University’s Center for Business Prosperity has highlighted the realities the Midlands region faces in relation to international trade.
The report, Midlands International Trade: Status and Challenges, looked at the region’s trade performance from the third quarter of 2019 to the second quarter of 2022 and makes recommendations for recovery and growth.
It highlighted the many factors disrupting exports across the UK, including Brexit uncertainty, the COVID-19 pandemic, supply chain disruptions, Brexit, lower demand and higher costs.
In 2019, the Midlands accounted for £56 billion in merchandise exports from the UK, accounting for 16% of all UK merchandise exports. However, the value of merchandise exports experienced a significant decline in 2020, falling by more than 10% to £45.6 billion – five times higher than the national average decline of around 2%.
In addition, Midlands services exports have been severely disrupted, with a drop of almost 25% in the value of exports, making it the hardest hit region. Between 2021 and 2022, the rate of recovery in the Midlands was slower than the UK average, resulting in a two percentage point drop in the region’s share of UK exports.
Machinery and transport account for more than 60% of the region’s exports, but a slow decline and recovery in this sector, particularly in the West Midlands, has taken its toll on the region.
John Doe, professor of economics at Aston Business School who worked on the report, said:
“We found that Midlands exports depended equally on EU and non-EU markets, but the decline in exports since 2020 was more pronounced in non-EU markets.
The East Midlands and West Midlands have shown varying rates of recovery, with the East Midlands showing signs of bouncing back again in 2022 while the West Midlands recovery has been weaker.
To revive and develop export in the Midlands, we recommend developing export markets and trade relations in the Midlands by building on the company’s regional strengths, exploring growth markets, and influencing UK trade policy.
“We encourage policy makers to assist SMEs in exploring overseas markets, developing export strategies and strengthening overseas marketing capabilities by providing training, education and inspiration to entrepreneurs and business leaders in the Midlands in relation to exports.
“There is also a need to pursue a regional industrial strategy that enhances the strengths and competitiveness of the region in emerging global markets, with a focus on sustainable export and company productivity.”
Professor Delma Dwight, Director of the Midlands Drive Observatory, said:
“It is clear that there is no single problem causing business challenges in the Midlands, and therefore no single solution.
“Also, the export journey is not a linear one, whether it is for large companies or small and medium enterprises.
Supporting companies of all sizes, wherever they are in terms of export growth, will help them anticipate and adapt to changing circumstances.
“If we can boost confidence across the board, that over time will become the bedrock of a more stable recovery.”
