UK - background market data

Population — 60.1 million. Language English.

Currency — Pound Sterling (£): £1= E1.49, £1=US$1.91. The euro has weakened slightly against the pound over the past year, which has been beneficial to UK importers but conversely less so for exporters. The US dollar is a still weak against both.

Government — Labour Party (centre left) leader and prime minister Tony Blair has headed up the country since May 1997. Despite heavy criticism of Britain’s involvement in Iraq, his government managed to win a third term in general elections held in May 2005, albeit with a much-weakened majority. Regardless of what happens at the next elections, scheduled for 2010, this will be Blair’s last term in office. He has already declared that he plans to handover the reigns to a successor in the not-too-distant future; longstanding Chancellor of the Exchequer Gordon Brown is expected to take over.

Economy — Following relative slowness in 2002 and 2003, almost certainly aftermath of 9/11, the UK’s GDP growth recovered in 2004 to 3.2 per cent growth, but fell in 2005 to 1.7 per cent. However, 2006 has been quite a bit better. Estimates suggest the final growth figure will be around 2.5 per cent. Certainly things are sufficiently buoyant to prompt the Bank of England recently to push interest rates up by a quarter point to 5.0 per cent in an attempt to cool things off a little. That is five-year high for them. The reason for the hike and possibly a few more similar nudges in the coming months is headline inflation, which crept up over the past year to 2.4 per cent, 0.4 per cent above the 2.0 per cent target set by the Treasury. House price inflation is really the big concern. Values of British homes have never been higher. The average UK house is now worth in excess of £200,000.

Housing market indices are always useful markers for the marine industry, particularly in the UK where  such a high proportion of people own their own homes. It is said that the housing market lags the marine trade by six months or so. If that is the case then 2007 could well be a bit slower when it comes to new-boat sales.

Happily the London stockmarket is still okay. The FTSE-100 share index is now back up to around 5,220 and it has been as high as 5,280 this year. Just four to five years ago following the destabilisation caused in the wake of 9/11 caused it to bottom out just below 3,700. UK unemployment remains fairly static at around 4.8 per cent.

Boat Park — Estimated at 600,000, fairly evenly split between power and sail. Around 100,000 or so of which are believed to be kept abroad.

Restrictions — Moderate VAT rate of 17.5 per cent. Boating education and registration schemes available, but voluntary stance (although compulsory registration on a few inland waterways).

Industry Body — British Marine Federation (BMF)

Website: www.britishmarine.co.uk
Contact: Chief executive Rob Stevens. ICOMIA member with around 1,550 member companies

The British leisure marine industry grew by 8.5 per cent in 2004, increasing its turnover to a total of £1,994 million, according to the latest British Marine Federation (BMF). In six consecutive years of growth from 1999-2004, the revenue of the UK leisure marine industry has grew by an extraordinary 57 per cent. The industry has also shown considerable strength in the export market, growing by 5.6 per cent bringing in £839 million to the UK economy, representing 42 per cent of total revenue for the sector in 2004.  

The industry employs approximately 30,000 people.

Key Boat Shows (2)

— London International Boat Show. Held annually in early January. Now attracts getting on for 640 exhibitors. Around 145,000 visitors attended the 2006 event, 5,000 more than the previous year. It was the third edition to be held at the ExCel riverside showground located in the Docklands to the east of the capital. The first at the new venue did much, much better in terms of exhibitors, but that was probably down to the novelty factor of a new venue as much as anything.

— Southampton International Boat Show, one of the world’s larger in-water events. Held annually in mid-September. It attracted 600 or so exhibitors and 118,000 visitors in 2006, quite a bit less than the tallies of a few years ago.

Market Outlook — The second-largest boating market in Europe, the UK remains in good health, although things very dpending on which business you’re in. As for new-boat sales, the entry-level is slowish, the middle market is better, but not perhaps quite as good as it was year ago, and the 50ft-plus sector is still very healthy, although note the spending is offshore in warmer climes.

Next IBI UK Business Report in November 2007 issue