Exports support millions of UK jobs, boosting wages and productivity – Board of Trade report finds

Wed 10 Mar 2021
Posted by: William Barns-Graham
Trade News

uk trade

The first public report from the government’s Board of Trade has found that, as of 2016, exports supported 6.5 million jobs in the UK and these jobs paid 7% more than the national median wage.

Global Britain, Local Jobs, published today (10 March), also found that exporting firms are 21% more productive than their counterparts.

Economic benefits

The board was convened in the autumn last year to advise the Department for International Trade (DIT) on its trade strategy.

Introducing the first of its quarterly reports, Trade Secretary Liz Truss, said: “It is free and fair trade that will bring huge economic benefits to this country, helping to create good quality and highly paid jobs in every part of the UK”.

A source close to Truss told Politico’s London Playbook this morning: “The whole report is an embodiment of Liz’s economic and philosophical vision for Britain and British trade. Low tax, economically liberal, outward facing, high standard and open to competition. Britannia Unchained for the post-Brexit trading era, basically.” 

Future growth opportunities

According to the report, three quarters (74%) of the jobs in question were based outside London and the majority (57%) were supported by exports to non-EU countries.

The report highlights that 90% of future global growth will take place outside the EU over the next five years and points to opportunities in digital, services and green trade.

The export opportunity for the UK’s green sector will be valued at £170bn a year by 2030, it estimates.

Quarter of jobs supported by exports

Another impact assessment report on jobs, published today from the Fraser of Allander Institute at the University of Strathclyde, found that 23% of total UK full time equivalent (FTE) jobs in 2016 were supported by exports.

Around 58% (3.8 million) of these were supported ‘directly’ by exports, and 42% (2.7 million) were in the supply chain of exporting industries.

Other findings include:

  • Manufacturing is the sector where exports support the largest number of jobs
  • The sectors most dependent on exports (in terms of absolute number of jobs) are the ‘professional, scientific and technical services’ and ‘admin and support services’ sectors
  • The country which supports the largest number of UK jobs through trade is the US, with 1.3 million UK
  • Over the same period, exports to the EU and the RoW supported 2.8 million and 3.7 million UK FTE jobs, respectively
  • Over a quarter of FTE jobs directly and indirectly supported by UK exports are estimated to be in London
  • Men benefit disproportionately more from exporting activity, with 64% by men holding jobs supported by exports compared to 36% held by women.

World trade matters

The reports confirm OECD findings that a large share of employment relies on international trade.

In a large country like the United States, around 10% of the workforce is involved in producing goods and services that are consumed abroad. This proportion goes up to 20% for France, almost 30% for Germany and 47% for a small open economy like Ireland.

Trade boosts salaries

OECD studies also show that trade plays a positive role in raising average incomes.

Compared with firms that do not trade across borders, exporting firms are usually more productive and pay higher-than-average wages to their employees. 

A recent OECD study on Market Opening, Growth and Employment found that multilateral trade liberalisation could increase wages by up to 4%.