The manufacturing sector continues to struggle in the global economic environment. Notwithstanding the continued weakness of sterling since the financial crisis, UK goods exports have not taken off significantly. In part this is likely to reflect the fact that, even with significant depreciation, UK goods export prices simply cannot compete with emerging market economies such as China or more goods export-oriented developed economies such as Germany. It also almost certainly reflects economic weakness in the Eurozone. Strong export performance remains highly contingent on Eurozone economic growth.
Manufacturers looking to expand will need to take advantage of economic growth in emerging market economies, refocusing their exports to these parts of the world. Considerable progress has been made in this respect over the past decade with the non-EU share of UK goods exports rising but more rebalancing will be necessary placing strain on the sector.