Wales has seen a big rise in the value of goods it exports but still has a trade deficit of more than £3bn, according to provisional figures from the Welsh Government. The new data shows Welsh firms exported £20.5bn worth of goods to markets around the world in 2022.
This was up 34.9% ( £5.3bn) when compared to 2021 and £2.8bn more than pre-pandemic levels in 2019. Imported goods to Wales were valued at £24.1bn in 2022 - up 49.3% ( £8bn) on the previous year and £5.9bn when compared to the pre-pandemic year in 2019.
When measuring export values against the value of imported goods this left Wales with a trade deficit of £3.6bn. Though it must be noted that wider global events such as the war in Ukraine and inflation have had an impact on the value of trade with oil, petroleum products and related materials particularly affected.
Excluding oil, the value of Welsh exports in 2022 was at £15.9bn up 20.7% (£2.7bn) on the previous year and £500m more than 2019.
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Export values to the EU increased by £2.5bn (27.5%) compared with the previous year and was £800m more than 2019. This accounted 56.5% of Welsh exports compared with 52.1% of UK exports.
While exports values to non-EU countries reached £8.9bn, up 45.8% by £2.8bn compared to 2021 and up £1.9bn (27.5%) on 2019 figures.
Large increases in non-EU export values were driven by exports to the US which were worth £3.4bn in 2022, the highest value market for Welsh products. This proportion was up from 14.4% in 2021 and up from 15.4% in 2019. Petroleum products accounted for £1.3bn of export values to the US.
Exports to the US were up 54.7% by £1.2bn compared to 2021 when petroleum product exports to the US were valued at £800m. Ireland is second largest export values market accounting for £3bn, followed by Germany at £2.4bn.
Though export values increased to both EU and non-EU destinations in 2022, the growth in export values is being largely due to the increasing proportion of non-EU exports. The proportion of Welsh export values to the EU has gradually fallen over the years, accounting for 56.5% in 2022, down from 59.7% in 2021 and 60.6% in 2019.
In terms of product categories, export values from Wales were dominated by mineral fuel exports of petroleum, petroleum products and related materials which made up £4.6bn (22.4%) of the total value of exported goods in 2022.
Power generating machinery and equipment was the second largest making up £3bn (14.5%) of total goods export values in 2022. Other transport equipment made up £1.8bn.
Excluding oil and other petroleum products, the value of imported goods to Wales was £16.6bn in 2022, an increase of £4bn (31.1%) when compared to 2021 and £2.3bn more than 2019.
Import values of goods from the EU increased by £2.1bn (36%) and non-EU countries by £5.8 billion (57%), compared with the previous year.
Import values from the EU accounted for 33.5% of Welsh imports, compared with 48.9% of UK imports.
The US was the largest import value market for Wales, accounting for £3.7bn of imports followed by China (£1.8bn) and the Netherlands (£1.4bn).
Among the product categories, oil was the highest value product with £7.5bn (30.9%) of Welsh imports. A proportion which was up 21.4% compared to 2021.
Paul Butterworth, interim CEO of Chambers Wales South East, South West and Mid, said the recent export figures were very encouraging.
"Exports for Wales have increased across the board and all indicators note that 2022’s exports were a marked increase on 2021," he said.
"Furthermore, total goods trade is higher now than in Q1 of 2019. This shows the progress and resilience of businesses who trade internationally as they attempt to make their way out of the financial issues set by Covid-19 and the various crises that have since caused economic difficulties.
“While international trade appears to be improving, the pressures placed on businesses domestically is causing many firms to be worse off in real terms than during or even before the pandemic. Inflation, raw material, labour and energy costs have risen significantly in this time and have put firms under significant pressure.
“So many Welsh businesses who want to export can’t because of these pressures. According to our quarterly economic survey, approximately only half of Welsh businesses were exporting in Q1 of 2023.
“We know that businesses who export are generally more resilient to outside pressures as they have access to diverse international markets. We must continue to support businesses in achieving their trade goals and alleviating the pressures placed on enterprise in the current economic climate would be a great step towards that.”
A Welsh Government spokesperson said: “The Welsh Government remains steadfast in its ambition to drive further growth in Welsh exports. Wales has so much to offer the world, and exporting can be a pathway to future prosperity.
"We will continue to work closely with our export support ecosystem to support businesses in Wales grow their international trade and to build on the solid platform that has been laid over the last twelve months.”
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