UK environment sector bucks economic trend

15th September 2011


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The performance of the UK low-carbon environmental goods and services (LCEGS) sector is outstripping that of the economy overall, according to the latest update from the business department (BIS).

The findings, which cover both the UK and the global LCEGS sector, reveal that domestic sales in 2009/10 totalled £116.8 billion, a 4.3% increase on the previous 12 months. During the same period, overall UK growth was just 1.8%.

The UK LCEGS sector is also performing better than the sector globally. Worldwide sales in 2009/10 were £3.2 trillion, only 1.8% up on the 2008/09 figure, largely due to no or poor growth in the US and Asia.

BIS says that more than 55,600 UK companies operate in the LCEGS sector, employing 914,273 people. The sector is dominated by three low-carbon industries – alternative fuels (general), alternative fuels for vehicles and building technologies – and two renewable-energy subsectors – wind and geothermal.

In the UK, the biggest areas of growth were wind energy (up 6.6%) and photovoltaics (up 5.8%). Exports of UK LCEGS goods and services were 3.9% higher in 2009/10, at £11.3 billion, than in 2008/09.

The UK is ranked sixth worldwide for the overall LCEGS sector, and sixth in 19 of the 24 subsectors, behind the US, China, Japan, India and Germany. In the five other subsectors, the UK is second for carbon finance and seventh for alternative energy sources, geothermal, environmental consulting and photovoltaics.

Looking ahead, BIS forecasts continuing growth for the UK LCEGS sector. It expects growth to be 4.8% during the current financial year, rising to 5.8% in 2016/17. Over the next decade, the business department is forecasting high growth for both wind and carbon finance. Much lower growth is forecast for the wastewater, air pollution and waste management subsectors, however.

BIS expects global growth to be 3.7% in 2010/11. Longer term, global growth is forecast to be 4% in 2015/16. Sectors forecast to perform strongly during the current financial year are carbon finance (up 9.2%), additional energy sources (6.8%) and wind (5%).

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