Introduction to the UK Country Commercial Guide

The Country Commercial Guide (CCG) is a comprehensive annual review of the United Kingdom's commercial, economic, political and investment environment.  It includes information to assist those doing business in the UK.  Below you will find the introductory chapter of the CCG, which includes the UK market overview, its challenges, opportunities and market entry strategy.  The remainder of the CCG consists of the following chapters:

• Political and Economic Environment
• Selling U.S. Products and Services
• Leading Sectors for U.S. Export and Investment
• Trade Regulations and Standards
• Investment Climate
• Trade and Project Financing
• Business Travel
• Contacts, Market Research and Trade Events
• Guide to Our Services

Download full guide with easy access to Chapters above: 
UK Country Commercial Guide (475KB)

Market Overview

• The United Kingdom (estimated 2008 GDP of $2.8 trillion) has the sixth-largest economy in the world and is a major international trading power. 
• Highly developed, sophisticated, and diversified, the UK market is the second largest in Europe and the sixth largest in the world for U.S. exports.
• With few barriers, the UK is the entry market into the EU for more than 40,000 U.S. exporters.
• U.S. exports of both goods and services are valued at an estimated $110 billion.
• In 2008, U.S. exports of goods alone to the UK increased by 7% to reach $53.8 billion.
• Major categories of U.S. exports include aerospace, automotive, electronics, healthcare, information technologies, and telecommunications.   
• The UK is the number one overseas market for travel to the United States, and about 4.5 million UK travelers visited the United States in 2008.
• The U.S.-UK investment relationship is largest in the world with a cumulative stock in direct investment valued at over $800 billion.
• Over two million jobs, about one million in each country, have been created over the years to manage and drive this investment.
• The UK is the top location in Europe for U.S. regional headquarters covering Europe, the Middle East, and Africa.
•  However, with a prominent financial services sector, the UK has been hit particularly hard by the global credit crisis.

Market Challenges

• The global economic crisis has affected U.S.-U.K. trade, which declined by 10% in the last quarter of 2008 compared to the same period in 2007.
• By January 2009, the UK economy was in recession, and the British pound had depreciated over 25% vis-à-vis the U.S. dollar.
• The significant weakening of British Pound affects demand for U.S. goods/services; however, the stronger Euro also makes EU suppliers less competitive than before.
• In recent months, there has been a sharp drop in the availability of credit in the UK economy.
• Lower consumer confidence is hurting retail sales, making some retailers reluctant to commit to new products and lines.
• Despite a stronger dollar, London is still one of the world’s most expensive cities.
• To succeed, U.S. exporters will need to offer competitive prices and terms.
• The UK is a sophisticated market and not suitable for all export products/services.
• Complex EU technical/regulatory requirements can be burdensome.
•  “Devolved Administrations” present some differences in policies/regulations among Northern Ireland, England, Scotland and Wales.

Market Opportunities

• The current economic downturn presents new opportunities in select market segments.
• Demand will increase for maintenance/repair of existing plant equipment; products and services to improve productivity and efficiencies; automotive aftermarket products; and ICT software and services to lower costs and improve business efficiencies.    
• The National Healthcare Service continues to upgrade hospitals and to purchase advanced technologies in medical equipment.
• Although the recession and weaker British pound will have an effect on UK travel, many experienced travelers will continue to visit new and repeat destinations in the U.S. 
• Green Opportunities:   The UK Climate Change law is the world’s first long-term, legally binding framework to address climate change through renewable energy with a target of 26% reduction in greenhouse gas emissions by 2020, and 80% by 2050. 
• The 2012 London Olympics and other special infrastructure projects continue to generate demand for a wide range of U.S. products and services.
• Opportunities have been centered on infrastructure development.  As we move closer to the Games, there will be significant procurement of sports-related goods and services.  

Market Entry Strategy

• Demonstrate a clear competitive advantage (i.e., price, quality, branding).
• Pay close attention to both the obvious and subtle cultural differences between the U.S. and the UK and adjust marketing strategies accordingly.
• Evaluate prospective partners carefully and choose an experienced, well-established local distributor. 
• Be flexible working with a UK partner during this challenging recessionary period.
• Express commitment to the market with a long-term perspective.