The UK\u2019s decision to leave the European Union ten years ago marked a significant moment for the national economy. Brexit has had significant effects on all aspects of the UK\u2019s national and local economies.\u00a0<\/p>\n
The most direct impact is that it has added barriers between the UK\u2019s tradeable sectors and the EU market. These sectors tend to contribute more to growth in a place, as exporting goods or services brings money into the local economy.\u00a0\u00a0<\/p>\n
Good exports\u00a0to Europe have decreased\u00a0\u00a0<\/p>\n
Since the official exit from the EU in 2020, goods exports from the UK to the EU have fallen by\u00a014 per cent<\/a>, compared to\u00a0an 8 per cent\u00a0decline in goods exports\u00a0to non-EU markets.\u00a0<\/p>\n Figure 1<\/strong> shows how this has\u00a0impacted\u00a0places by estimating changes in trade values (2022 price) per job in the tradeable sectors.\u00a0\u00a0\u00a0<\/p>\n In 49 of 63 British cities,\u00a0goods exports to\u00a0the EU have\u00a0declined, and in 37 they have declined more than exports to other countries.\u00a0\u00a0<\/p>\n Altogether, since the official exit, goods exports from British cities to the EU have declined by close to \u00a320 billion, averaging to about \u00a3632\u00a0per tradeable job\u00a0per year, compared to\u00a0an average decline\u00a0in goods exports\u00a0to non-EU markets\u00a0of\u00a0\u00a3374\u00a0per tradable job\u00a0per year.\u00a0\u00a0<\/p>\n Figure 1:\u00a0\u00a0Estimated goods exports to\u00a0both the EU and the rest of the world have declined\u00a0\u00a0<\/p>\n Source: HMRC, UK overseas trade in goods statistics; ONS, Business Register and Employment Survey;\u00a0Centre for Cities\u00a0calculations\u00a0<\/p>\n In three cities, reduced trade with the EU has led to more than \u00a34,000 for every tradeable job per year since 2019. The most impacted city has been Sunderland, with exports to the EU falling by about \u00a34,850 per tradeable job per year.\u00a0<\/p>\n Goods exports to non-EU markets have also decreased\u00a0<\/p>\n EU exports account for 62 per cent of the total decline in goods exports since the official exit.\u00a0\u00a0<\/p>\n But goods exports to other countries have largely declined as well. This is the case for 38 of the 62 cities. In Worthing and Aberdeen, two cities with the sharpest decline in goods exports, non-EU exports have been the main cause.\u00a0\u00a0<\/p>\n This suggests that Brexit trade barriers have played a significant role in the UK\u2019s weakening goods exports, but\u00a0they\u00a0are\u00a0not the only factor. Rather, the UK\u2019s goods production and manufacturing sector may be losing global competitiveness for\u00a0additional\u00a0reasons, such as high energy prices.\u00a0\u00a0<\/p>\n Service\u00a0exports\u00a0have increased\u00a0\u00a0<\/p>\n Unlike goods exports, service exports from the UK to both EU and non-EU destinations have grown by\u00a0more than 25 per cent<\/a>\u00a0since 2019 due to the UK\u2019s competitive advantage in knowledge-intensive services (KIBS).\u00a0<\/p>\n Service exports are harder to estimate at the local level, but sectors such as KIBS have been the main contributor to the growth of places such as\u00a0large cities outside of London<\/a>.\u00a0\u00a0<\/p>\n