Surge in export earnings for financial sector
Financial and professional services firms in Wales made £2.2bn in export earnings in 2016, a rise of 11% from the year before.
The rise in export earnings was part of a UK-wide trend which saw the sector’s total overseas sales rise 15.8% to £95.7bn.
Every nation and region of Britain saw a rise in financial services exports with the growth varying from 29% in the north east of England to 9% in Scotland.
It came after several years of near stagnation between 2011 and 2015 when subdued global demand in the wake of the financial crisis led to average annual growth of just 0.9%.
The figures are revealed in a report by TheCityUK, the industry body representing the financial and professional services industry.
The report, Exporting from across Britain, demonstrates the extent to which financial and related professional services firms based in Wales export their services to the rest of the world.
And it also reveals the importance of financial services export earnings to the sector and the wider economy in Wales. Financial and professional services account for 44% of all services exports from Wales,
However, productivity in the sector in Wales is the lowest in Britain with output per job just 61% of the UK average.
Services exports together are equivalent to nearly a third of the value of goods exports from Wales.
Katharine Finn, Cardiff city chair of the TheCityUK, added: “Cardiff has a long and proud history of trade and export and was once the UK’s biggest export port for coal and steel. Today it’s services which are driving the city’s growth.
“Together with the rest of Wales, exports in services are rapidly catching up to those of goods, with regionally based financial and related professional services firms’ exports worth £2.2bn in 2016.
“Financial services are a critical part of this – bringing prosperity to Cardiff and to Wales more broadly. We should take pride in this industry and continue to build on our increasing international reputation as a dynamic financial centre.”
The UK is the world’s leading net exporter of financial services, with a trade surplus of £57bn in 2016. This is nearly twice that of the next leading country, the USA, at £31bn.
Although the increase in export earnings coincided approximately in time and scale with the fall in the value of the pound after the EU referendum in June 2016, they are not thought to be related because exports in the sector tend to be driven by non-price factors such as quality and patterns of trade, according to experts.
Anjalika Bardalai, chief economist and head of research at TheCityUK, said: “While London is an important piece of the puzzle, over half the industry’s exports come from elsewhere – £2.2bn from Wales alone. In 2016, industry exports saw double digit growth in nearly every part of the country.
“It’s this collective national contribution which helps to make the UK the world’s leading international financial centre.”
The report shows that the south east of England was the largest exporter of financial and related professional services outside London in 2016 (£11.6bn), followed by Scotland (£7.2bn) and the English north west (£6.6bn).
Taken together, Scotland and the north west alone exported financial services worth almost three quarters of the financial services exports of France as a whole.
> Exports of services are catching up those of goods, with financial services forming a big part of this