Internationalisation Strategy Refresh Baseline data analysis Research Team Spring 2016

Refresh on data, covering:- Focus today:- Summary of global prospects, with national growth comparisons and forecasts Change in the world’s largest economies and their share of global GDP Sectoral information and analysis of trading partners GM level: EU markets and City Region data is analysed - key trading partners Also covered in baseline refresh:- Analysis of Foreign Direct Investment and trade in goods Greater Manchester Business Survey – propensity to export Visitor Economy

US and UK stronger growth in Weak Euro Area. BRICs mixed - China slowing 7%, India stronger growth up to 8% by 2017, Brazil/Russia weak. Watch: Mexico Indonesia Nigeria Turkey

Focus on BRICs – GDP growth rates from 2000 to 2014, China and India remain strong, Russia & Brazil slow Source: IMF World economic Outlook Database.

Performance of other example target markets, from the 2013 Internationalisation Strategy, remains mixed (US & UEA stronger) Source: IMF World economic Outlook Database.

Where are the worlds growth markets? Top 5 by scale: China, US, India, Japan and Germany The chart shows the top 15 economies (ordered by 2015 size) in terms of percentage share of world GDP. China is now the largest economy, and its share of world GDP has grown from 9.7% in 2005 to a projected 16.9% in 2015 In 2005 the US accounted for almost 20% of world GDP, the 2015 projected GDP output is 16.1%. India, Indonesia and Saudi Arabia have all increased their share of world GDP in the last decade The remaining BRICS countries presented in the chart, brazil and Russia, have seen a slight decline in their share of world GDP The European countries in the top 15 have all seen a decline in their share of world GDP in the last decade Source: IMF World economic Outlook Database figures are estimates as not yet full year Percentage of world economic output by major countries (GDP size in PPP, 2015)

Following the global economic crisis, UK trade in good dropped in Both imports and exports of goods then steadily increased until From 2013 imports have remained flat, exports peaked in Q2 of 2013 Total UK trade exports for August 2015 are £23.5 billion. This is an increase of £2.3 billion (11 per cent) compared with August Total trade imports for August 2015 are £30.5 billion. This is a decrease of £1.9 billion (5.8 per cent) compared with August Note – data points are imports and export totals each quarter

UK Export in Goods: Top trading partners 2015 and 2014 – US and Eurozone are still the UK’s major trading countries. The US alone accounts for 15% of total UK exports (2015 year-to-date) Source: HM revenue and Customs Data is ranked in descending order of the current year to date value The analysis includes both EU and non-EU trade Values are expressed in £ million and are provisional – may be updated

UK exports in goods to the EU was well over half of total exports However, the last two years (2013, 2014) have seen an increase in the proportion of exports to Non-EU countries Source: HM revenue and Customs The analysis includes both EU and non-EU trade

Summary of opportunities by country China: Overtook US as the world’s largest economy (2014). Key sectoral opportunities include: Advanced Engineering / Automotive, Electrical equipment, Financial and Professional, Higher Education, Digital & Creative, Fashion/Textiles, Health Innovation. India: GM has extensive links to India, due to historical trade Indian population in UK. Opportunities include key growth sectors such as Professional Services, Manufacturing, Digital, and Health Innovation UAE (focussing on Abu Dhabi/Dubai): Opportunities in nuclear power supply chain manufacturing and expertise, as well as strong existing links to GM US: Despite China overtaking, still experienced increased growth and is a key market for GM exports, with links to New York, Washington, Chicago Germany: Growth set to increase slightly, key trading partner in GM growth sectors France: Growth opportunities for GM supply chain Manufacturing, as well as strengthening existing Financial Services links Netherlands: UK has seen high levels of export growth. Main sectors: Medical and pharmaceutical, advanced engineering/vehicles, general industrial machinery Nordics: UK export growth of 14% since Over 40% to Sweden, Norway experienced strongest growth. Key markets: Chemicals, Clothing, Transport Equip.

Source: HMRC GM businesses 2005 to Note data are nominal values and not adjusted for changes in prices Greater Manchester EU vs Non-EU trade data from HMRC shows that GM generally outperformed the North West region and the UK nationally with regard to growth in the export of goods between 2013 and 2014

Propensity to export (not total value of exports): The GM Business Surveys show that the number of businesses exporting in GM has declined slightly in the last 3 years % companies exporting in GMSMEs Exporting in the UK %19% %21% %21% Data from the GM Business Survey shows a 1.7% point decrease in the proportion of companies exporting between 2012 and 2014 BIS SME barometer, shows increasing numbers of SMEs exporting nationally (21%). Not comparable to the GM survey, but indicates potential to grow support Main barriers to exporting: Regulations/legal requirements were cited as the biggest barriers Geo-political risks Language and cultural barriers. Source: Greater Manchester Business Survey and BIS SME Barometer