The release of 2016’s Pink Book published by the Office of National Statistics shows that 44 percent of the UK’s total trade in 2015 was in services. The largest sectors for export of services, compared with goods, has seen a steady growth since 2000 with average exports to the European Union up seven percent per annum, and 7.3 percent per annum to countries outside of the European Union. Besides the ‘other’ business services category, the UK’s strength in services remains to be in financial services.
The UK’s largest sectors for export of services in 2015 were as follows:
‘Other’ business services
The rise in service trade, according to the Office of National Statistics, is largely driven by ‘total professional and management consulting services, particularly business management and management consulting’, which is categorised here as ‘other’ business services, making it the largest sector for export of services in the UK. Total UK exports in this sector counted for 31.3 percent of total export of services in 2015 with the world buying £70.5 billion in business services. The United States remains to be the UK’s largest trading partner for export in services, having spent in excess of £20.6 billion in business services.
Financial services
The financial services sector counts for 22.5 percent of all UK export of services in 2015, according to the Pink Book. Financial services serve as an umbrella term for banking, credit-card companies, tax preparation, accountancy firms and investment funds to name a few. The total exports of financial services in 2015 came to £50.8 billion with the United States investing the majority at £12.2 billion, and France investing £5.1 billion in 2015.
Travel
The third largest export sector for services in the UK as of 2015, is the travel industry. The sector makes up for 13.2 percent of total services exported worldwide. Interestingly, Australia, Britain’s tenth largest trading partner for export of goods, highest expenditure of UK exports was in the travel sector at nearly £1.3 billion.
Transport
£24.1 billion GBP was spent on UK transport services exports worldwide in 2015. The fourth largest export sector for services counted for 10.7 percent of total exports of services in the same year, with the largest investing partners being the United States at £4 billion and France at £1.9 billion.
Telecommunications, computer and information services
The world spent £15.9 billion in telecommunications, computer and information services in 2015; seven percent of the total UK export of services. The fifth largest export sector for goods counts for film, TV, music, software and wholesale of computers, to name a few with the United States investing the most at £3.3 billion, while the whole of the European Union (28) invested a total of £6.8 billion.
Insurance
The insurance sector accounted for 5.7 percent of total UK export of services, a total of £12.9 billion in 2015. Legal and General Group, Prudential plc and Aviva plc continue to sit at the top of the list of major life insurance and financial services companies exporting in this service. The United States imported the majority at £4 billion worth of services, with Ireland investing £740 million.
Intellectual Property
Intellectual property can be patents, trademarks, designs and copyrights, to name a few. In 2015, the largest single importer of UK intellectual property was the United States who spent nearly £3.4 billion, contributing to the £11.5 billion and 5.1 percent of total exports of this sector.
Government
Government exports in 2015 counted for 1.2 percent of Britain’s total services exports; a worldwide expenditure of £2.6 billion. While Russia is not among the United Kingdom’s largest trading partners, it was the largest destination for government exports, with an expenditure of £132 million. Germany, Britain’s second largest trading partner for export of services, imported £71 million in UK government exports.
Personal, cultural and recreational services
The world’s total expenditure on the UK’s personal, cultural and recreational services exports was £2.5 billion in 2015—£1.1 billion of which was imported by the United States, according to the 2016 Pink Book. Personal, cultural and recreational services include artistic services, education services, health services and heritage services. This sector is the ninth largest export sector for goods in the UK and 1.1 percent of total UK exports for that year.
Manufacturing on physical inputs owned by others
The 10th largest export sector for services in the UK is the manufacturing on physical inputs owned by others. This covers the processing, assembly, labelling and packaging by enterprises that don’t own the goods concerned and are paid a fee by the owner to undertake the mentioned activities. This commercial sector counted for 1 percent of the UK’s entire exports f services in 2015, with the world expenditure on such being £2.2 billion.
The UK’s largest single trading partner for export of services is the United States, whose expenditure on UK exports totalled at over £53 billion in 2015. However, the UK is consistently a major source for services for the EU28, having invested a collective of £88.9 billion into our country in 2015.