Surge in ex­port earn­ings for fi­nan­cial sec­tor

Western Mail - - BUSINESS - Chris Kelsey As­sis­tant head of busi­ness chris.kelsey@waleson­

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.

An­drew James

> Ex­ports of ser­vices are catch­ing up those of goods, with fi­nan­cial ser­vices form­ing a big part of this

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