UK exporters show signs of strength according to new DHL/BCC Trade Confidence Index
Evidence, at last, that the UK’s economic situation isn’t all doom and gloom: a recent survey conducted by DHL in collaboration with the British Chambers of Commerce suggests that exporters remain confident. What’s more, orders continue to show that expansion is on the cards.
The DHL/BCC Trade Confidence Index was designed to measure the UK’s exporting health. Over a thousand UK exporters, ranging from micro firms to large companies, were surveyed between May 23rd and June 15th 2011. Analysis of questionnaire responses, along with the export documentation required of UK companies exporting goods outside the UK, provides us with a comprehensive overview of the UK’s current international trade situation.
Whereas only 16% of exporters expected profitability to improve in Q1 2009, 50% of those surveyed in Q2 2011 expected it to improve over the next year. Confidence in increased turnover rose from 41% to 46% since earlier in 2011, while confidence in increasing profitability rose from 17% to 28%.
Although slightly fewer export documents were issued compared with the first quarter of 2011, figures were up by 3.62% compared with a year ago. This suggests that export sales are continuing to grow. However there is regional variation, with figures suggesting that London and the South East continue to dominate UK export activity, while activity in the North East, Northern Ireland and Wales is significantly lower.
The picture painted by the Index also recognises the challenges faced by UK businesses. Perhaps unsurprisingly, given the current Eurozone debt crisis and bumpy UK recovery, exporters remain reluctant to invest and take on more staff. Businesses of different sizes appear to be facing different experiences, with micro exporters particularly facing cash flow issues.
David Frost, Director General of the British Chambers of Commerce, commented: “There is a disconnect between the strong performance of exporting firms and their lack of confidence when it comes to investing and creating jobs…many businesses are holding back on investment decisions, despite seeing strong export sales and orders in recent months. Cash flow is still a real problem for exporters – particularly smaller firms.”
So how do we address this problem? Government has to help, says Frost. “Where there are products and services that help the private sector identify and sell into foreign markets, these should be effectively communicated to the firms they’re intended to help.”
Phil Couchman, CEO of DHL Express UK and Ireland, called for greater support, particularly for small businesses. “The UK’s economic recovery relies on exporting and investment, specifically from small to medium sized businesses. As the lifeblood of the British economy, the reluctance from exporters to invest is a concern. We need to shore up confidence within this community and ensure they’re supported in tapping into the purchasing power of other markets.”
Such support can only help businesses drive growth and transform their confidence in improved export profitability into a reality.
To download a copy of the DHL/BCC Trade Confidence Index, click here
For support with international trade, download our comprehensive importing and exporting guide