The UK's export performance has been through a number of marked changes in recent decades. In 1950 Britain's manufacturing sector accounted for 26% of the exports of the main manufacturing countries. By the beginning of the 1970s that share had fallen to 11%, and the decline continued through the 1970s and early 1980s (see chart). In the past 10 years, however, the UK's decline may have been halted. The nation's share of world exports seemed to reach a floor in the middle of the last decade, and has since remained relatively stable.
Increased competitiveness in the early 1980s partially accounts for the improvement. Between 1981 and 1987 UK competitiveness improved sharply as the exchange rate fell. However this is only part of the story, says Schroder Economics. Between 1987 and 1992 competitiveness worsened slightly, but UK exporters actually managed to increase their market share. It seems likely that non-price factors also form part of the explanation. Improved industrial relations, a more flexible labour market and a strong investment performance mean that Britain is now better able to compete on the world stage.