The British Chambers of Commerce (BCC) on Sunday published a major international trade survey, looking at how many UK companies, including Norfolk businesses, are currently exporting and the barriers they face in penetrating new growth markets. The survey of nearly 4,700 respondents shows that the number of member businesses that are actively exporting has risen from 32% in 2012 to 39% in 2013, and that the EU is still the most popular market. However, many businesses are now recognizing the changing dynamics of the global economy, with more companies targeting the fast-growing economies of the United Arab Emirates and India to try and increase their export sales. The survey also found that businesses that are currently established in China see that market as their greatest growth opportunity, compared with potential exporters (those who have never exported before).
The EU remains the most popular market for existing and potential exporters:
- Despite Europe losing its lustre (particularly after the weak Euro GDP data published this week) more than eight in ten exporters trade into EU markets – unchanged from 2012 at 87%.
- Central and South America came out bottom with only 28% of exporters trading with the region. This region is home to Brazil – an economy predicted to become one of the five largest in the world
- 88% of potential exporters would consider trading with the EU
- Only 40% of potential exporters would consider exporting to Asia. The slowdown in the region has diverted attention to Africa and the Middle East, which is experiencing faster growth.
Exporters are looking for the ‘next wave’ of opportunities:
- Of the 20 ‘priority markets’ identified by UK Trade and Investment, The United Arab Emirates, Poland, China and India are the most popular growth markets among current exporters
- Of those considering exporting in the next five years, Brazil, Russia and Qatar rank highly – 32% of businesses will consider exporting to Brazil in the next five years, compared to only 20% of businesses who are currently exporting there.
Market knowledge and access are key factors for those considering exporting:
- More than half of non-exporters (58%) say not having a suitable product or service is the principal reason for not exporting.
- 6% of non-exporters state they have limited knowledge of the commercial aspect of exporting and the difficulties they’ve had finding overseas customers, agents and/or distributors are reasons for not having exported goods or services. This highlights the need to address business’ lack of market knowledge and improve access for exporters.
- 80% of respondents cited ease of finding customers, agents or distributors as the most influential factor when deciding when and where to export, followed by 77% citing cash flow and payment risk and 74% citing the knowledge or skills required.
Commenting on the findings, Caroline Williams CEO Norfolk Chamber of Commerce said:
“With austerity measures set to continue until 2018, it is clear that a sustainable recovery will have to rely heavily on diversifying and re-balancing our economy towards exports. Norfolk companies have massive untapped potential to expand, but they need the right backing to help them compete globally and break into new markets. With Europe losing its lustre and falling behind the economic pace of the outside world, it is high time for all businesses to reassess their priorities. “Small, medium and mid-sized companies need support on the front line. Companies want to work with people who understand business, with the local knowledge on the ground that can deliver practical contacts, potential partners, real customers and supply chains. To meet the scale of the UK’s economic challenge, funding for the development of SME exporters and in-market support should be increased further as part of the government’s upcoming Spending Review.
“Those already exporting to China, the United Arab Emirates and India regard those markets as offering the greatest potential for their business. This shows the confidence and willingness of Norfolk businesses to expand their sales in the fastest-growing markets once they have taken the steps to export there. The positive experience of companies that have made the leap into these markets hints at the huge potential for Norfolk to grow its export base if the support is there to help them connect to these markets.
“The government has a responsibility to help bridge the gap between market opportunity and risk. Businesses should be better exposed to the opportunities of global trade through greater support from the government for promotional activity and tradeshow attendance. The time to act on these opportunities is now, as only then will the UK stand a chance at competing with the rest of the world, and driving our economic recovery for years to come.”
