UK exporters continue to be confident, according to the latest Trade Confidence Index by The British Chambers of Commerce (BCC) and DHL. The research found that the number of businesses reporting improved export sales increased in the first quarter of 2017.
The Index, which measures the volume of trade documented by the Chambers of Commerce, increased by 5.5 per cent on the quarter, and has increased by 9.06 per cent from the same quarter last year (the second highest level on record).
According to the research, currency fluctuations do remain a concern for businesses, with 52 per cent of manufacturers and 25 per cent of services firms saying exchange rates are more of a concern compared to three months ago.
The Index also found:
The balance of manufacturers reporting improved export sales rose from 16 per cent to 26 per cent. Looking at services, the balance of firms reporting improved export sales rose from 8 per cent to 10 per cent.
The balance of manufacturers reporting improved export orders rose from 13 to 22 in Q4 2016, while in services it fell slightly from 6 per cent to +5 per cent.
Based on the expectations of turnover over the next 12 months, the balance of manufacturers confident of an increase held fairly steady, rising from 43 per cent to 44 per cent. In services this rose by four points from 35 per cent to +39 per cent.
Confidence that profitability would improve rose to 28 per cent for services companies – up from the 21 per cent in Q4 2016. The balance of manufacturers jumped by ten points, from 22 per cent to 32 per cent.
“Confidence among exporters is strong, which is a timely reminder that businesses are doing their best to ignore the cacophony of political noise around them and focus on the success of their own operations,” said Dr. Adam Marshall, BCC director general. “While confidence among UK exporters is high, rising costs, recruitment difficulties, and concerns around currency fluctuations could temper their growth if allowed to continue unchecked. Alleviating the burden of upfront costs and addressing the skills gap would increase productivity, investment and growth.
“For UK exporters to succeed in the long-term, the next government must deliver not only a Brexit deal which allows for frictionless trade with Europe, but also pragmatic and practical support for businesses looking to develop lasting links with new customers and markets around the world.”
Ian Wilson, CEO DHL Express UK and Ireland, said: “Despite the many unanswered questions about what a post-Brexit Britain will look like, this latest Quarterly International Trade Outlook demonstrates that UK exporters remain optimistic about what the future holds.
“As a facilitator of international trade, we’ve seen our customers embrace the short term benefits that came with the fall in the value of the pound. However, this report demonstrates that while businesses are confident, they are not complacent – with currency fluctuations a lingering concern for exporters. In these uncertain times, there is an even greater imperative to expand the portfolio of markets businesses trade with to help spread the risk across multiple currencies.”