Britain has lost £74 billion in goods exports since Brexit, a significant shift towards a services-led economy. Research reveals that the nation's industrial sectors, including cars and pharmaceuticals, have been severely impacted since the UK left the single market and customs union in 2020.
The economy's share of goods exports decreased by a fifth between 2019 and 2024, marking the steepest decline among the G7 group of large economies. The decline is attributed to Brexit itself, rather than external factors such as higher energy prices or cheap Chinese goods.
The UK has lost ground in goods that are in high demand globally, including medicines, electronic microcircuits, and data processors. Some of the nation's once-staple strengths, such as road vehicles, chemicals, and dairy, have disappeared in the past five years.
Since the Brexit referendum, Britain has slipped from the world's 11th-largest goods exporter to 14th. The losses are concentrated in sectors identified as central to future prosperity, including advanced manufacturing, clean energy, defence, and life sciences.
Business sentiment reflects the strain, with 54% of UK exporters stating that the post-Brexit trade agreement has made it harder to sell into the EU. Only 16% of exporters feel the deal has helped them grow their exports.
Smaller firms have borne the brunt of the losses, with relative goods exports to the EU falling faster than those of larger rivals. The shift towards services, which now account for 59% of total exports, is seen as a natural progression rather than a problem.
Research suggests that the UK should focus on defending its world-leading sectors, such as aero engines, and re-evaluating its approach in areas where its advantage is slipping. The findings challenge ambitions to reindustrialize the country and highlight the difficulties in achieving this goal.
The economic implications of Brexit have sparked debate, with some arguing that rejoining the single market or customs union could boost trade. However, others caution that this would come with significant costs and compromises.
