October 26, 2023
The Trade Confidence Outlook, conducted by the BCC’s Insights Unit, is a survey of more than 2,000 UK SME exporters. It has revealed exports continue to languish for many of these firms as the global economy remains under pressure.
The UK’s picture on exports has been broadly static since the pandemic, with the number of SMEs reporting decreased sales now regularly 10 percentage points higher than in 2017/18.
The proportion of firms all businesses surveyed reporting decreased sales began to worsen in the run up to Brexit and has remained stubbornly higher ever since.
The situation is most volatile for SME manufacturers, with 28% reporting a decrease in exports, 27% an increase, and 45% no change.
This compares to SME services exporters where 23% saw a decrease, 26% an increase and 51% remained constant.
William Bain, Head of Trade Policy at the BCC, said: “The picture for global economy was already looking weak for the year ahead, but with the escalation of conflict in the Middle East, it is now even more uncertain.
“The reality is if UK business is to thrive, then we must export more, it’s as simple as that. If we want to remain one of the world’s largest economies, then we need more firms selling goods and services internationally.
“But the pandemic, supply chain disruption, Brexit, non-tariff trade barriers and global headwinds have all made this more difficult over the past few years.
“To combat this, we need to lean more heavily into the advantages that the UK possesses. We are already a world-leader when it comes to digital trade, and we must make more of the opportunities that provides.
“We also need to build a strategy to protect the UK’s supply chains – the US, the EU and China are all investing hundreds of billions of pounds in sustainable and low-carbon technology.
“We don’t have that kind of money, but we do have great strengths – services, renewable energy, green finance, engineering, professional services, cutting edge manufacturing, food and drink exports, and R&D.
“Business needs to work with Government to put in place a framework that makes use of all the advantages the UK has, to keep us at the top table, and to access incentives for our exports overseas.
“Finally, we need to look again at ways of improving trade with the EU. It is still our biggest trading partner, but firms continue to express huge frustration with the complexity and costs involved - which go beyond what they face elsewhere.”