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Total value of UK goods exports to reach £445bn in 2026

The share of services in total UK exports is expected to hit parity with goods from 2026, up from 44% in 2016, marking the tipping point when British exports will largely become service-led, according to the Barclays Trade Index. This milestone will be reached due to continued positive growth in service exports, which will grow in aggregate more rapidly than goods exports.

Despite this shift, goods exports will remain a critical part of the UK’s trading economy, with healthy growth of 46% forecast for the next decade, taking the total value of UK goods exports in 2026 to £445bn compared to £305bn today.

The UK’s fastest-growing goods export categories with a 2016 value of over £30bn each are transport goods, with forecast growth to 2026 of 54%, and chemicals at 48%.

The UK will also remain an established player in high-value industrial products such as turbines, propellers, engines and valves, and the UK’s current largest export category by value – machinery and electricals – will grow in value to £81bn in a decade. However, this sector’s growth will be weaker than for some other goods categories, partly due to a more subdued outlook for machinery and equipment investment spending in most advanced economies.

Mike Rigby, Head of Manufacturing, Transport and Logistics at Barclays, said: “Within the goods sector, the transport industry is expected to set the pace in terms of growth over the next decade, largely driven by strong performances in the automotive and aerospace sub-sectors which we expect to continue to show solid production and export trends. Significant investment in technology and innovation in both industries provides a strong foundation for future growth.”

Trends in emerging markets will be a major driver of growth. Softer demand in the premium car sector from most emerging markets will result in the pace of expansion being weaker than during the past decade. However, the expertise of UK based manufacturers in electric vehicle and hybrid technologies means that the automotive sector remains well placed for growth over the next decade.

Growth in aerospace sector exports will be driven by demand for more fuel-efficient, quieter aircraft and incremental upgrades to existing fleets, however, there will also be increasing competition over the next decade as domestic aerospace industries grow. Rising per capita incomes in emerging markets and ageing populations in advanced economies will also play a part in driving the 48% predicted increase in UK chemicals sector exports, which include cosmetics and medicines.

However, the slowdown of China’s industrial sector and the end of the two-decade commodity super-cycle will result in fuels becoming the weakest-performing area of the UK export mix (4% increase in decade to 2026 compared to 46% increase in previous decade).  The flagging pace of emerging-market industrialisation and the embattled steel industry will also result in fairly subdued growth in UK metals exports.

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