Latest international trade survey reveals widening gap divides UK exporters
Lesley Bachelor, Director General of the Institute of Export is calling for SMEs to make more use of the knowledge and skills training available to exporters after a key trade survey shows they are being outpaced by the bigger corporates.
Lesley Bachelor commented: “The majority of companies surveyed do not train staff in international trade and less than one in three small businesses see a specific need for training. Yet this lack of knowledge and training is holding back export momentum, especially for SMEs. Much more needs to be done to make these companies aware of the training programmes, apprenticeship and finance schemes available.
“The IOE is the only professional body in the UK offering recognised, formal qualifications in International Trade and we know from our graduates that success and competitive advantage in global markets has to be rooted in sound knowledge.”
Whilst nearly one in four respondents showed an encouraging awareness of Government schemes provided by UK Trade and Investment (UKTI) through Chamber of Commerce offices and UK Export Finance (UKEF), those with a turnover above £25m are making the greatest use of the support on offer.
In addition to inexperience the survey found a lack of finance and government support and ambivalence about Europe are also constraining factors for micro, small and medium sized businesses to enter overseas markets.
More than 53% of respondents were from the manufacturing and engineering sectors. Their feedback points to a growing divide between companies with a turnover of up to £25m and larger enterprises with a turnover in excess of £25m. With Europe still seen as the UK’s main export market, fewer than 50% of exporters believe that continued membership of the EU is critical for their business. Smaller companies were evenly divided on support for the UK’s withdrawal or continued membership on altered terms; however, those with a turnover above £25m – the group that has most to lose from withdrawal – believe continued membership of the EU is critical for their business.
The survey, an annual barometer of Britain’s export industry since 1996, is sponsored by global insurance company American International Group, Inc (AIG).
This year’s survey incorporates the annual AIG Export Confidence Index which reveals a drop in business confidence to 58.5 from the previous findings of 71.2. Despite a fall in business confidence from 2012, three out of five companies remain optimistic of export business growth in the next five years.
In another key finding many companies reported overseas buyers are placing orders with them based on previous experience of UK reliability and skills, even when some of the goods are sourced overseas.
Despite global economic conditions and the volatility of foreign exchange markets, over 50% of companies above £1m turnover a year have responded to the demand for UK products by putting an export strategy in place, a rise on previous years.
Outside Europe, the key export markets for UK businesses are: Asia, China, the Middle East Eurasia and North America.
The annual survey builds up a clear picture of the UK’s export market which is then used by Government, the Bank of England and other UK policy makers to help shape and influence future government policy.