British Marine’s latest Industry Trends survey shows that UK businesses posted revenues not seen since the financial crash. The trade association is now calling for government support to boost exports
The UK marine industry is posting revenues not seen since the financial crash, a new report by British Marine reveals. Revenues across the UK leisure, superyacht and small commercial marine sectors grew by 1.6% in the 2015/16 period to £3.01bn. The last time the industry posted revenues of over £3bn was 2008/9, the report says.
These figures are supported by British Marine’s bi-annual Industry Trends survey, which gauges business sentiment from the last six months, since the Brexit vote.
The latest data also shows that the industry directly contributes over £1.11bn of Gross Value Added to the UK economy, an increase of 3.7%.
Marine businesses in the UK now support over 33,000 full-time equivalent employees (up 4.6%) and exports make up 29% of industry revenue. Key export markets include the eurozone £392m (44.6%), North America £157m (17.8%), other European countries including Russia £90m (10.2%), China £40m (4.5%) and the Middle East £30m (3.4%).
The report also shows that revenues in the engine and equipment manufacturing sectors are up 8.8% to £335m. Marinas and moorings saw a 3.6% increase to £222m and business support services registered £145m in revenues, up 2.7%.
Commenting on the state of the industry, British marine CEO Howard Pridding says: “The industry remains robust – revenue is growing and we are taking on more employees. Despite the post-referendum volatility impacting on business and consumer confidence the industry remains bullish and keen to take advantage of the short and medium term opportunities that lie ahead, starting with the 2017 London Boat Show.”
The survey also found that the Brexit vote in June 2016 had an immediate and sharp impact on marine businesses. In July 2016, businesses reported a negative outlook for the coming six months, with a net rating score of -7%. But business confidence has bounced up 17% since then, with a net positive confidence rating of 10% posted at the end of 2016.
Boatbuilders are particularly buoyant post-referendum, the report shows, with a net rating score of 50% (up from 0% in May 2016), increasingly driven by the superyacht sector, worth £605m, as identified in the Superyacht UK annual survey released in September 2016.
With the depreciation of the pound against the euro since the EU referendum, and with the EU the primary supplier of marine raw materials and components for UK boat manufacturers, cost of manufacturing inputs has risen sharply, climbing 1.98% between Q2 and Q3 2016.
However, according to research by British Marine, exporting manufacturers still accrue a net benefit from sterling’s depreciation. It has increased the purchasing power among foreign consumers and is driving demand for British products. As a result, confidence is high amongst a significant number of boatbuilders trading in international markets.
British Marine and its members have recently met the Department for International Trade to discuss what support government can give the industry.
The message from exporters was that while Europe is and will remain significant, businesses are exporting to many other markets and need government backing to take advantage of opportunities to trade with the likes of China and North America.
Commenting on the need for government support, Pridding says: “Our members’ greatest long-term concern is uncertainty and we will continue to work closely with government to ensure the sector is given as much backing as possible from government especially as the Brexit negotiations begin. Access to the single market is of course important, but member companies are keen to minimise tariff and non-tariff barriers.
“Members are also keen to maintain access to skilled workers from across the EU and the government needs to do all it can to make sure that any future immigration policy with the EU supports marine businesses that are ambitious to grow and export,” he concludes.