Navigating Import and Export Trends in the UK

In an increasingly interconnected global economy, small businesses in the United Kingdom (UK) have more opportunities than ever to expand through import and export. In June 2024, the ONS UK trade report saw goods imports rise by £3.3 billion (7.1%) and exports increase by £2.3 billion (7.6%), indicating significant growth in trade between both European Union (EU) and non-EU countries.

Whether you're looking to source raw materials, introduce new products, or expand your customer base internationally, trade could offer a important pathway to business growth and diversification.

However, navigating the complexities of global trade requires a solid understanding of current trends, opportunities, and challenges. As the UK's trade landscape continually evolves due to factors like Brexit, post-pandemic inflation, and shifting global dynamics, staying informed is crucial to success.

In this blog, we'll explore the latest trends in UK trade and identify potential international opportunities for small businesses.

How to start an import/export business in the UK

Current trends in UK Trade

The UK's trading environment is characterised by its strong connections. According to the latest UK Trade in Numbers report from the Department for International Trade, the total value of UK trade (exports plus imports) was an astounding £1.4 trillion in the last year.

While UK businesses trade with countries around the globe, their top trading partners include the United States (US), Germany, and the Netherlands. The US is currently the largest single export market, accounting for £154 billion of the total exports. On the import side, the UK sources the most from China, with the Department for Business and Trade saying a total of £62.7 billion in goods entered the country last year.

In terms of sectors, the UK's service exports, particularly in financial services, remain a significant contributor to trade. Services accounted for almost half (46.9%) of total UK exports last year. Goods like machinery and transport equipment, including cars and aircraft, are the top exported products, reflecting the UK's strong manufacturing capabilities.

Export trends

The Organisation for Economic Co-operation and Development (OECD) predicts that the volume of UK goods and services exports will grow by 0.6% in 2024, with more substantial growth (1.9%) anticipated in 2025.

In contrast, the International Monetary Fund (IMF) forecasts a decrease in the volume of UK exports by 1.2% in 2024, followed by modest growth (0.7%) in 2025.

The decline in exports in 2023, particularly in goods, has set a challenging backdrop for 2024. Service exports, however, are showing more resilience.

Import Trends

The IMF projects the volume of UK imports of goods and services to decrease by 0.7% in 2024, with a further slight decrease of 0.2% in 2025.

The OECD offers a slightly more optimistic view, predicting a marginal decrease of 0.01% in 2024, followed by an increase of 1.1% in 2025.

The decrease in imports reflects ongoing adjustments in trade patterns post-Brexit and the impact of global economic conditions.

Country-Specific Trade Trends

United States: The UK continues to maintain a strong trade relationship with the US, which remains its largest trading partner. In June 2024, exports to the US were valued at £4,878 million, preserving its position as the top export partner. Imports from the US increased significantly by 27% from June 2023, driven by precious metals, aircraft, pharmaceutical products, and mechanical appliances.

Germany: Germany is the UK's largest import partner, with imports valued at £6,147 million in June 2024. This represents a 4% increase from May 2024. Exports to Germany also saw a significant increase of 29% in June 2024 compared to May 2024, driven by aircraft and electronic equipment.

Netherlands: Trade with the Netherlands remained stable, with exports valued at £2,514 million in June 2024. There was no significant change in the trade balance with the Netherlands over recent months.

France: Imports from France increased, driven by mechanical appliances and aircrafts, with a substantial rise in value between May and June 2024. Exports to France were valued at £1,951 million in June 2024.

China: Trade with China saw a decrease in exports, with a significant drop of 73% in May 2024 compared to the previous year. Despite this, imports from China increased by 3% between May and June 2024.

Source of the country-specific trade trends: UK overseas trade in goods statistics June 2024)

Opportunities for Small Businesses

The development of new technologies presents significant opportunities for enhancing supply chain resilience. Advances in data utilisation enable businesses and governments to map and monitor supply chains more effectively, facilitating the identification of vulnerabilities. Real-time predictive analytics powered by AI can anticipate bottlenecks and fluctuations in demand, moving beyond reliance on historical data (Thomson Reuters).

Additionally, innovations such as 3D printing allow for the domestic manufacturing of critical goods, reducing dependence on international supply chains. Investing in domestic capabilities in growth sectors, as outlined by the UK Chancellor, can further enhance resilience while capitalising on new industries (H M Treasury). Collaborative efforts with international partners to share knowledge and strategies are crucial, and free trade agreements can help eliminate trade barriers to promote joint approaches to diversification and information sharing.

The Power of Business Partnerships

Identifying High-Demand Markets for export

For small businesses looking to export their goods or services, identifying high-demand markets is crucial. The ONS data reveals that there are growing opportunities in markets outside the EU. The US remains a key market, not only for large enterprises but also for small and medium-sized enterprises (SMEs). The UK's strong trade ties with the US are supported by a shared language, similar business practices, and robust legal frameworks.

According to the Department for International Trade and a report by the House of Lords, Asia is another promising market for sustained trade growth, particularly within China and India. Although trade with China has seen some fluctuations due to geopolitical factors, the demand for high-quality British goods — especially in luxury products, education, and healthcare — remains strong. India, with its rapidly growing middle class, presents opportunities in sectors like technology, pharmaceuticals, and food and beverages.

Emerging markets in Africa are also gaining traction. Countries like Nigeria and South Africa are becoming increasingly important trade partners. The UK has established trade agreements with 18 African nations, including Nigeria and South Africa. These agreements are part of the UK's strategy to engage with Africa following Brexit, with a focus on sectors including technology and education.

Import Opportunities for demand goods and services

On the imports side, the Critical Imports and Supply Chains Strategy report highlights the key sectors and industries for import. The strategy identifies critical goods essential to the UK's economy, such as energy supplies, medical equipment, and certain agricultural products.

According to the Department for Business and Trade, the UK has a strong demand for medicinal and pharmaceutical products, which are among the top imported commodities. As healthcare needs grow and new medical technologies emerge, imports in this sector are expected to increase. The report also highlights the UK’s imports of a variety of food products, including fruits and vegetables. As consumer preferences evolve and the demand for diverse and exotic foods increases, the UK will likely see growth in this category.

In conclusion, the UK's import and export landscape is an evolving environment, offering numerous opportunities for small businesses to grow and diversify. Despite challenges posed by global economic shifts, Brexit, and the pandemic, the latest trade data highlights promising trends, especially in sectors like services, technology, and pharmaceuticals.

As your business grows overseas, sign up for a Wise Business account, so you can pay, get paid, and manage multiple currencies in one international account.

Further Data and Resources:

UK Trade in Numbers

ONS International Trade Data

Critical Imports and Supply Chains Strategy

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