West Midlands engineering exporters are flying high in international markets, with half of firms generating more than 50% of their turnover from export markets, according to a survey by accountancy and business advisory firm BDO LLP and the Institute of Mechanical Engineers (IMechE).
According to the BDO/IMechE research, the largest overseas market for West Midlands manufacturers continues to be Western Europe with 42% of firms surveyed exporting goods and services to the region. Half of exporters intend to grow international sales even further in the next five years, with North America in particular identified as a key target among a third of exporting firms.
The UK is the 10th largest goods exporter in the world and the vast majority of engineers (78%) believe that it is the quality of UK products that holds the most value for overseas buyers, in stark contrast to price (only 20%).
With product quality being the key to export success, constant innovation and re-invention is the prevalent strategy needed to maintain a seat at the global export table. However, only 42% of manufacturers in the West Midlands felt that their company was currently spending enough on R&D to keep its competitive position. This is of particular concern given the increasing sophistication of low cost economies such as India and China closing the gap on UK product quality.
Tom Lawton, Birmingham-based partner and head of manufacturing at BDO, said: “International trade is the cornerstone of sustainable, long term growth for West Midlands manufacturers. With foreign markets accounting for such a large proportion of sales, it is clear that firms that refuse to rely on domestic markets and invest in their export capabilities are reaping the rewards.
“The Government must do everything it can to facilitate expansion into these foreign markets, be it through favourable tax breaks to exporters or direct support from departments such as UKTI. Companies must also play their part by maintaining global competitiveness through reinvestment into their business and products. The world is becoming an increasingly competitive place and this pressure is only set to increase.”