Commonwealth countries: future growth markets for UK exports
In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, discusses the Commonwealth:
- Commonwealth countries, taken together, have buoyant economic prospects and their share of global output continues to increase (especially in PPP terms). The EU28 share, in contrast continues to decline.
- UK exports to the top eight Commonwealth countries rose by over 31% between 2006 and 2016, but total exports rose by 40%. And the share of UK exports going to the top eight Commonwealth countries fell from 7.5% in 2006 to 7.0% in 2016.
- Commonwealth countries should be among the future growth markets for UK exports, given their favourable economic prospects.
There have been several UK economic developments worth noting over the past fortnight:
- The Markit surveys showed continuing growth for March, but the cold weather had adversely affected output in construction and services.
- The Bank of England’s latest Agents’ survey was fairly encouraging.
- Services output grew 0.6% (QOQ) in the three months to January, but there was further weakness in the car market.
- There was a modest narrowing of the current deficit in 2017Q4 to £18.4bn (3.6% of GDP).
- The OECD remained downbeat about the UK’s prospects, forecasting growth of 1.3% for 2018 and 1.1% for 2019.
- There have been few Brexit developments in the past fortnight. The Bank of England issued a statement saying that financial firms should take a “business as usual” approach during the transition period.
- Z/Yen’s latest global financial centres report confirmed London retained the top spot ahead of New York.
Ruth Lea said, “There is little doubt that Commonwealth countries have the potential to be significant growth markets for the UK’s exports, given their favourable growth prospects and demographics. This is all the more likely given the probability of trade deals with individual Commonwealth countries after Brexit.”