Confidence at record high among exporters
Confidence at record high among exporters but more support needed to reach £1trillion target, says BCC/DHL report
• Survey of more than 2,400 exporting firms shows that 72% of exporters expect their turnover to improve this quarter – the highest number on record
• More than one third of exporting firms (34%) said that they expected to increase staff over the next quarter
• The overall volume of exports for goods fell by 3.1% compared to Q3 2013, emphasising the need for more support for exporting businesses
The British Chambers of Commerce has today (Wednesday) published new research in conjunction with DHL Express looking at the health of the UK’s export market. The BCC/DHL Trade Confidence Index, which measures both UK exporting activity and business confidence, shows that turnover confidence among exporters is now at the highest level on record (72%). Confidence was particularly strong among exporting manufacturers, with 69% believing that their turnover is likely to improve, compared with 66% last quarter.
The volume of exports for goods fell slightly this quarter – representing a decrease of 3.1% compared with Q3 2013 and 0.9% compared with the same quarter last year. Businesses are confident, but if we are to reach the government’s target of increasing exports to £1trillion by 2020, more must be done to help firms break into fast-growing markets abroad.
The key findings from the report are:
• Confidence among exporters about future turnover is at its highest level since 2007 (72%), with 69% of manufacturers expecting turnover to increase.
• More than one third of exporting firms (34%) said that they expected to increase staff over the next quarter • Although the volume of exports in goods fell overall compared with the previous quarter, they increased for nearly half of service sector firms (47%) and for 42% of manufacturing firms in Q4 2013*
• Nearly half of exporters (46%) said their export sales increased in Q4 2013, compared to only 7% who said that they decreased
• More than half of exporters (62%) believe that their profitability will increase this year.
• The number of exporting businesses claiming that raw material costs were adding to price pressures increased from 34% to 38% in Q4 2013.
Commenting, John Longworth, Director General of the British Chambers of Commerce (BCC), said:
“What we must take away from this research is that the confidence of our exporters is at a new high. This counts for a lot, as it shows ambition and willingness for businesses to export even more in 2014. But we can’t ignore the fact that the volume of exports were down at the end of last year. We cannot afford to sit back and expect exports to increase without dedicated hard work and support – not if we are to reach the government’s target of increasing exports to £1trillion by 2020.
“Everyone has to take responsibility and play their part – government, civil servants and business alike, so that firms can make some real in-roads in high-growth markets overseas in countries such as Mexico, Nigeria and Indonesia. We are seeing small signs of export reorientation away from Europe and North America towards some of these stronger growth regions, but there is still a lot more to do. As a nation we currently only spend 0.02% of GDP on trade support, which is nowhere near enough if we are going to rebalance our economy towards net exports.
“The British Chambers of Commerce is doing its bit, by accrediting overseas Chambers of Commerce and business groups in 41 countries across the globe, so that business people have a first port of call when they step off the plane, where they can receive practical advice and support on the ground. But we must all work together if we are to compete on a global scale and put the UK at the forefront of the exporting agenda over the months and years ahead.”
Commenting on the report’s results, Phil Couchman, CEO of DHL Express UK and Ireland, said:
“Confidence is at a record high amongst exporters which shows a marked step change in attitudes compared with previous reports. Despite the fact that the overall volume of goods exported fell slightly, SMEs are feeling positive about the future. This is also reflected in the recent IMF projections for UK 2014 economic growth of 2.4%.
“Positively, there continues to be a high level of demand overseas for “Brand Britain” and newly cited emerging markets, such as the MINT (Mexico, Indonesia, Nigeria and Turkey) countries, present great opportunities for British businesses. With the right advice, product and plan, they have the potential to succeed in these fast-growing emerging markets.
“It is important that these new levels of confidence are not lost and that British businesses have the information and support they need to succeed. To reach the Government’s target of £1trillion by 2020, we must continue to address the challenges and barriers to export.”