Headlines
- Despite recent falls, the North East is a high exporting region, with strong exports from the automotive, chemicals and pharmaceuticals sector.
- The key export markets for the region are the European Union and North America.
Introduction
Trade, for the purposes of this chapter, is defined as the exchange of goods between the North East and other parts of the world. Globalisation, or more precisely economic globalisation, is the integration of national economies through trade, capital flows and migration. Foreign direct investment (FDI) and the spread of technology are also key contributors.
Exports are a major component of economic output and goods exports contribute more to the North East economy in per jobs terms than for any other part of the UK.
The total value of North East goods exports for the 12 months ending Quarter 4 2009 was £9,626 million, a decrease of £1,667m (14.8%) compared to the 12 months ending Quarter 4 2008.
Q3 2008 saw the recent high point of North East exports (£2,976m) with Q4 significantly lower and Q1 and Q2 2009 lower still. Driven by falls in Mineral Fuels and Machinery & Transport in particular, total North East goods exports stood at £2,555m in Q4 2008 down 14% on Q3 and at £2,311 for Q1 2009, down 10% on Q4 2008 – a total fall of 26% of the Quarter's totals in six months. UK goods exports fell by 14% over the same period. However, the region saw a recovery in the last 2 quarters of 2009 to see exports standing at £2,758m in Q4 2009, an increase of 26% over Q2 figures. This compares to UK growth of 12% over the same period.
The value of goods exports as a percentage of regional GVA is larger in the North East than for any other nation or region of the UK. In 2009 it was estimated that the total value of North East exports stood at 24.2% of regional GVA compared to 17.8% for the UK. Note, this does not mean that exports contribute 24.2% towards North East GVA – it is only the value added element of goods export sales that count towards GVA.
Similarly, the value of North East goods exports per job is the second highest in the UK - £9,521 per job in 2009. However, this is a fall from £10,900 per job in 2008, when the goods exports per job was the highest of all the regions in the UK. This position is now occupied by the South East with agoods exports per job figure of £10,431. Nevertheless, over the period 2001 - 2009 the North East has seen a 27% increase in this indicator since, almost twice the increase observed nationally (15%).
Destination of North East goods exports
Data for 2009 shows that the North East exported goods to the value of £9,628m, a fall of 15% of the exports from the regional figure of £11,293 million recorded in 2008. The majority of exports go to Europe, the EU receiving 57% and Western and Eastern Europe combined (outside of the EU) receiving 6% of this total as shown below. North America accounted for a fifth of the region’s exports with Asia & Oceania taking 10%. Other parts of the world received around 6% of North East exports.
The total value of North East goods imports for the 12 months ending March 2009 was £7,024 million, a decrease of £2,094m (23%) compared to the 12 months ending Q4 2008. This compares to a fall across the UK of approximately 10% imports over the same period.
Q3 2008 saw the recent high point of North East imports (£2,689m) with Q4 significantly lower and further falls recorded in each Quarter until a growth in imports recorded in Q4 2009 (£1,988m, a 22% growth over the figure recorded in Q2 2009).
Origin of North East goods imports
In 2009 the North East imported goods to the value of £7,024m. The majority of imports arrive from Europe, the EU contributing almost half of this total as shown below. North America, whilst accounting for a quarter of the region’s exports, provided just 8% of imports. Conversely, 16% of the region’s imports come from Asia & Oceania, substantially more than the 10% for exports.