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Exporters remain steadfast despite slowdown in global growth

• 29% of exporters have reported that sales have increased in Q3, compared to 47% in Q2
• More than half of exporting businesses (59%) believe their profitability will improve in the next 12 months
• Recruitment intentions have increased as the majority of exporters (75%) tried to recruit staff in Q3

The British Chambers of Commerce (BCC) and DHL Express have today published their Q3 Trade Confidence Index, which measures both UK exporting activity and business confidence of more than 2,300 exporting firms. In the latest quarter (Q3), fewer exporters reported increased sales, with the majority saying that export sales have remained consistent. Despite the rate of growth slowing, exporters remain determined to expand their businesses internationally.

The report shows that growth in export activity has slowed slightly since its peaks in Q1, with confidence levels for both manufacturing and service exporters falling. The volume index of trade documentation issued by Accredited Chambers of Commerce also decreased slightly to 116.93, from 119.27 in Q2.

The key findings from the report are:

• Almost a third (29%) of exporting businesses reported that export sales increased in Q3, compared to 47% in Q2 2014
• Of those exporters no longer reporting increased export sales, most said that sales have remained consistent (61% in Q3 compared to 48% in Q2)
• Slightly fewer exporting businesses have intentions to invest in new plant and machinery (33% in Q3, compared to 37% in Q2)
• However, more than half of exporting businesses (59%) believe their profitability will improve in the next 12 months
• Recruitment intentions have increased as the majority of exporters (75%) tried to recruit staff in Q3
• A third of exporters (33%) said their cashflow had improved in Q3, compared with 13% who said that it deteriorated
• The highest increase in exporting activity was seen in Wales, followed by Scotland and Yorkshire and the Humber

Commenting, John Longworth, Director General of the British Chambers of Commerce (BCC), said:

“Slowing export growth highlights both the home-grown and global challenges we face in addressing the UK’s trade deficit. The slowdown globally, particularly in the eurozone, is having a real impact on UK exports, and businesses are taking a cautious approach to future plans for growth. This backdrop is creating uncertainty right at the time when we need to be getting more businesses into the export game.

“While the global slowdown is having a short-term impact on international trade, Britain’s poor export performance is a long-term, home-grown problem. We must step change our approach to supporting existing and potential exporters if we are to make real progress towards rebalancing the economy.

“To link UK businesses to the vast opportunities around the world, the government needs to introduce sustained, high-quality support for exporters. The UK should be matching and indeed exceeding the level of resource dedicated to export support by our major international competitors. A concerted campaign to support growing businesses in also required to foster the exporters of the future, many of whom are unable to access finance even before they are able to consider global expansion.

“By building international networks, investing in our export skills base and removing barriers to trade we will encourage more British businesses to look beyond our shores. As a nation we can and must do more if we are to meet the export ambitions the Prime Minister has set for 2020.”

Commenting, Phil Couchman, CEO of DHL Express UK and Ireland, said:

“Despite a slight fall in the volume of growth of export trade documentation, there is still a great opportunity for British businesses of all sizes to expand internationally.

“Recent growth figures and the ongoing discussion about the future of the UK’s position in the EU have created some uncertainty but, it is important to remember that there is a huge demand for British products within and beyond Europe.

“As we enter an election year, it is important that any uncertainty does not stall the growth ambitions of UK’s existing and future exporters. Ongoing investment is key to meet the Government’s 2020 export target and it is crucial that businesses are equipped with the information and resources they need.”