Automotive inspiration can fire up our other great sectors

IN what I am sure is the most anticipated moment of the year – or maybe that’s just me – the trade data for 2021 has been released by Government to set out how the North East international trade community has performed.

The big picture shows that trade is on a slow recovery, after two years (from 2019) of significant shocks and restrictions which reduced trading levels across the UK. Total trade for the North East totalled £24bn in 2021, up slightly from 2020 by 0.8%, but 13% down from 2019.

By far our most exported products are ‘machinery and transport’, ie automotive industries. This should probably not shock many readers, but the story is important, as it demonstrates our strength in this part of the private sector. Providing around 50,000 jobs in the region, regeneration opportunities and new investment in advanced manufacturing, especially in the electric vehicle field, we can consider ourselves world leaders in the field.

However, diversity is important at all levels to develop prosperity and mitigate against market shocks. For example, if the EU market crashes, your American income remains unaffected. We have taken great strides in developing offshore wind, chemicals, and advanced manufacturing, but now is the time to get to that next level.

As one of the most reliant regions on the EU for international trade, we are largely intertwined because of our dominant automotive sector (worth 40% regional trade), whose supply chains rely on frequent cross-border EU movements to produce finished goods, 80% of which are also exported primarily to the EU.

We see from the trade figures that when there is a decline in ‘machinery and transport’ trade, there is a significant drop in our overall trade. Having more robust exporting sectors will help the region in these sector shocks, as well as unlock more career opportunities.

Here is where the promised levelling-up agenda could go a long way to delivering this. Better connectivity and skills could open more businesses across different sectors to new opportunities.

Meanwhile, developing smarter infrastructure and technologies could streamline supply chains and border processes to grease wheels of trade, so that our already leading sectors can go further. Research estimates for every 1% infrastructure investment, you see a .5% increase in trade. In conclusion, our automotive industries can be used as an inspiration to fire up the other great sectors here in the North East, and unlock our true global potential.