Imports key to export growth, study finds
HSBC report claims importing improves UK’s role in global supply chain
Importing is key to the UK’s export growth, as it increases the UK’s productivity and export potential, according to a new study.
The ‘Importing for Export Success’ report, released this week by global bank HSBC, claims ‘intelligent importing’ of materials such as machinery components will have the effect of increasing the UK’s export output in the key sectors of industrial machinery and transport equipment.
The report’s authors claimed this low-cost import of necessary materials would allow British companies to add significant value to finished equipment, boosting export activity as a result.
With the UK expected to lead the G8 countries in its pace of recovery in 2014, the report forecasts positive growth in total UK merchandise exports of around 4% a year in 2014-15, rising to 6% during 2016-20.
Similarly, import activity is expected to increase by just under 5% a year in 2014-15, rising to just over 5% to 2020.
The report draws on HSBC’s Trade Forecast report, which claimed that half of the UK’s total export growth to 2020 will be driven by the two sectors of industrial machinery and transport equipment.
The same report claimed these two sectors would also account for more than 30% of the growth in imports by 2030.
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As a whole, the ‘Importing for Export Success’ report showed that between 6-12% of the increase in UK manufacturing productivity between 1998 and 2008 could be accounted for by an increase in imported goods, with 4-7% of export activity over the next 10 years also driven by imports.
The report appears to counter the popular notion that the imbalance between imports and exports in the UK represents a barrier to growth.
Alan Kier, chief executive of HSBC Bank plc, said: “While there are concerns about the UK’s trade deficit, this research shows that imports used in the right way benefit UK businesses and the overall economy by boosting productivity and driving export growth.
“Far from being the enemy of UK manufacturing, they are the overlooked ally of many smart businesses.
“This report both celebrates businesses that are embracing intelligent imports and highlights the need to continually innovate to stay ahead.”