The QITO report is designed to give British businesses a better understanding of international opportunities, with a focus on dynamic new markets. It also features a Trade Confidence Index, which measures the UK’s exporting health by analysing trends in the volume of trade documentation issued by accredited Chambers of Commerce.
The findings of the latest QITO report shows that in the manufacturing sector firms have reported an improvement in export sales, however exporters continue to report price pressures and recruitment difficulties. 68 per cent of exporting manufacturers saw exchange rates as a concern to business in Q3 2017 and 70 per cent faced recruitment difficulties. The volume of trade documentation issued by accredited Chambers of Commerce increased by 2.3 per cent on Q2 2017, and increased 4.0 per cent on Q3 this time last year.
In his foreword to the report, Ian Wilson, DHL Express UK & Ireland CEO, considered the still uncertain climate but commends businesses’ resilience:
“Now is an interesting time to be part of the UK’s export industry. Whilst it remains shrouded in uncertainty about what Brexit will look like and the implications for UK businesses large and small, those businesses are demonstrating a defiantly positive export performance.
He also highlights the overwhelming global connectedness; “the world is now more connected than it ever has been and this last Quarterly International Trade Outlook shows that UK businesses are embracing this connectivity – despite the lack of clarity that exists about what lies ahead.”
Dr Adam Marshall, BCC Director General, emphasised the gravity of starting trade talks before the end of the year:
“It’s imperative that the Brexit negotiations move on to trade talks before the end of 2017 – with a transition period agreed and a trade framework that retains relatively favourable terms of trade with our largest overseas market, the EU27.”
He also suggested that to get UK businesses trading on a world scale we need to nail down some fundamentals. “Lowering the cost of business, plugging the skills gaps and improving connectivity by investing in our infrastructure, would clear away blockages to investment and growth, and allow UK firms to prosper globally.”
Trade Confidence Index
The Trade Confidence Index, which measures the volume of trade documentation issued by accredited Chambers of Commerce, increased by 2.3 per cent on the quarter. The index now stands at 126.51, up 4.0 per cent on Q3 2016.
Britain’s regions and nations
After a fall in the growth of export documentation volume in Q2 2017, most regions have rebounded in Q3. The largest quarter-on-quarter-increases were Yorkshire and Humber (27.4 per cent), Scotland (13.3 per cent), and the West Midlands (3.4 per cent).
Export sales and orders
In the manufacturing sector, the balance of firms reporting improvements in export sales over the previous three months rose to +29 per cent from +27 per cent. The balance of manufacturers reporting improved export orders improved to +24 per cent from +20 per cent in Q2.
The services sector saw a continued pattern of slow growth which started in Q2 of 2016, with the balance of firms reporting improved export sales rising to +14 per cent from +13 per cent. For export orders the balance of services reporting improvements decreased from +9 per cent to +8 per cent.
Trade and Economic Outlook
The World Trade Organisation (WTO) is currently expecting world trade growth of 3.6 per cent in 2017. In 2018, the WTO is forecasting global trade growth to slow to 3.2 per cent. The UK trade deficit in goods and services narrowed by £0.7 billion between August and September 2017.
The International Monetary Fund (IMF) forecasts global growth of 3.6 per cent in 2017 and 3.7 per cent in 2018.
The BCC currently expects that UK economy to grow by 1.6 per cent in 2017, 1.2 per cent in 2018 and 1.4 per cent in 2019.
The Q3 2017 QITO report includes fact sheets for Ethiopia, Kenya, and Tanzania. Each fact sheet includes an economic snapshot, opportunities for UK businesses, market strengths, cultural tips, and Customs tips.
Read the full Q3 2017 QITO here