Almost three quarters of exporting businesses are experiencing growth in their export trade according to the latest International Trade Survey commissioned by the Institute of Export.
The annual survey, sponsored by AIG and carried out by TAEFL, also found a similarly positive outlook reflected in the confidence levels reported by respondents; with 48% stating they were very confident trading overseas and 48% being relatively confident.
Over 80% of the participants have been trading internationally for more than 10 years and 10% have been trading for 5 years or more, allowing the breadth and depth of expertise captured in the survey to provide a detailed snapshot of the current export situation.
It also offers a valuable insight into whether exporters regard continued membership of the EU as critical to their business.
Of those surveyed, 57% felt that it was critical and 26% said it wasn’t. A concerning 17% didn’t know – which clearly demonstrates the need for businesses to be able to access advice to help them to understand the full impact of the trading bloc element of the EU and the ease of doing business there.
When asked if their dependency on exports in the next 5 years would increase, decrease or remain the same, the majority of firms questioned (68%) stated that it was due to rise, while 28% predicted that it would remain at its current level.
Demand for products and strategic growth were cited as the main reasons for this increased dependency, with product demand reaching 65%, and strategic growth accounting for 39% – a clear indication that UK businesses are still being driven by external forces rather than driving growth strategically.
Although the majority of those taking part did not perceive there to be any increased risk in developing overseas markets or exporting abroad, with 66% stating that they were facing the same level of risk, compared to 29% who believed risks were increasing, just over half of the respondents (55%) did identify some obstacles to trading internationally. These included: compliance with local regulations (20%), finance (14%), a lack of knowledge (13%), language (13%), taxation/tariffs (12%) and concerns over loss of intellectual property (5%).
Issues were also raised concerning insufficient information about financing and funding international trade. Areas such as payment methods, costs of getting paid, inadequate financial planning, a lack of understanding of extended working capital, and insufficient price planning – which often results in not achieving desired profits in the early stages – were all highlighted.
This lack of certainty on fundamental areas demonstrates that despite there being extensive training and support programmes supplied by Government, banks, Chambers and the IOE, firms are still not accessing it. Understanding why and how to address this will be crucial to UK export growth.
IOE director general, Lesley Batchelor OBE said: “Finding out what we don’t know should be the key starting point for any business – the more informed we are the better businesses we run internationally. Getting by is not enough. Successful international trade depends upon understanding and expertise, and we need to start addressing this now with our young people in schools. They are the exporters of tomorrow and our role is to ensure they possess the knowledge and skills to be a success.”