UK / Flanders Trade Figures for 2022 Show Explosive Growth Fueled by Energy Crisis
Trade figures just released by Flanders Investment & Trade (the official government body for the Flanders region of Belgium) for 2022 reveal a massive spike (134.56%) in exports from the UK to Flanders from 2021 to 2022. The data shows that recovery post-Brexit continues, although the energy crisis has distorted this figure. Mineral products and chemicals & pharmaceuticals together amounted to almost 77% of total UK exports to Flanders in 2022.
The port of Antwerp-Bruges (PoAB) has long played a crucial role in the energy sector and acts as a major import and export hub for natural gas within Europe. Due to the sharp rise in energy prices, the export of natural gas from UK to the EU rose by 985% in 2022, but this was from a very low base the year before. The UK’s import of Gas oils of petroleum or bituminous minerals from Flanders in 2022 had a total value of € 3.54 billion.
Pharmaceuticals have also been experiencing an atypical period due to the pandemic. The import of COVID vaccines, medicaments and immunological products from Flanders into the UK totalled €4.57 billion in 2022, making the pharmaceutical sector the leading sector for imports from the region. However, there was a fall in British pharmaceuticals exports to Flanders of 10.7% to €1.2 billion.
Flanders is recognised as a global leader in R&D, particularly in life sciences. The UK and Flanders enjoy exceptionally close collaboration on life sciences. During the pandemic, more than 90% of all UK Covid-19 vaccines were made in Flanders. However, it is currently unclear what the recent Windsor Agreement will mean for that collaboration and whether the UK will re-join Horizon Europe Research Programme.
Overall the UK is regarded as one of Flanders’ most important trading partners. In 2022 the UK maintained its position as Flanders’ 4th highest export market. Imports into the UK from Flanders increased by 17.7% in 2022, equivalent to an increase in value of €4.2 billion euros, and totaling €27.95 billion.
Flanders Investment & Trade has also revealed that the exceptional growth figures in 2022 are unlikely to be replicated in 2023 as January figures already show a slow down as energy prices fall and commodity prices return to pre-crisis levels. However, the figures are still strong. In January 2023, the UK exported €1.82 billion worth of goods to Flanders, a 20.55% increase compared with the same period in 2022.
The value of goods exported from Flanders in 2022 globally was also exceptionally high at €479.7 billion euros, more than a quarter higher (+26%) than in 2021 and 61% higher than in 2020 and 47.7% higher than in 2019, the year before the pandemic.
However, growth slowed down in the last quarter, due to declining energy and flattening commodity prices. According to a Flanders Investment & Trade analysis, based on data from INR/NBB, this increase was mainly driven by rising world prices. Since export figures have become ‘normal’ again from the 4th quarter, exports from Flanders have shown signs of a slowdown.
Overall, the value of Flanders’ global exports is growing at the pace of the EU (+20.9%) and the global average (+25.2%) (source: FIT analysis based on WTO and EUROSTAT data). In 2022, Flanders was the world’s 16th largest goods exporter.
Since Brexit in 2020, Flanders has become a key access point for many UK companies wishing to trade with the EU. This is due to many factors but include its proximity to the UK, ease of doing business there and the global dominance of the Flanders ports. Residents of Flanders and those living within 500km of the region account for 60% of all of Europe’s purchasing power. Many of the goods referenced in the trade figures were therefore using Flanders as an entry and exit point for onward transmission.