UK’s exporters’ expectations of a “super summer” in 2012 have been overshadowed by the Eurozonecrisis and prospective currency fluctuations, as the fifth DHL/BCC Trade Confidence Index
reveals.The report, which draws on a survey of over a thousand exporters and an analysis of companyexport documentation found that exchange rates were a concern for 40% of firms, showing theEurozone crisis’ impact in terms of UK competitiveness and the buoyancy of one of its biggestmarkets. A net balance of just +21% of firms felt profitability would increase in the coming 12months, down from +30% the previous quarter, with falling profitability expectations across allfirm sizes.
These results were in spite of a summer of celebrations and high hopes for the economic impactof the summer on exporters. They are in stark contrast to research conducted in 2010 by DHL, whichfound that 56% of businesses anticipated that the focus on London over this period would creategreater global demand for British goods.
However, the latest Trade Confidence Index showed an increase in the number of firms reportingan increase in export orders, up from +39% in Q1 to +49% in Q2.
Phil Couchman, CEO of DHL Express UK and Ireland said: “SMEs’ concerns around exchange rates andprofitability highlight that there is still more to be done in terms of support for Britishbusinesses who are venturing into overseas markets. But recent export figures are strong, and thereis reason to believe that the “super summer” − a once-in-a-lifetime opportunity that will putBritish businesses firmly in the spotlight − could present a fantastic opportunity to make inroadsinternationally.”
He said to sustain momentum, large and small businesses should start thinking now about how bestto serve this international audience once the events are over, by initiating an export programmefor their goods and services to reach that target market.
“The worries highlighted in the report show that businesses should seek advice fromprofessionals with a local presence who can provide specialist insight,” he insisted
John Longworth, Director General of the British Chambers of Commerce, said: “Business concernsabout the Eurozone have increased in the last quarter, and it’s no wonder. In the last few monthswe have seen two General Elections in Greece, a bailout of Spanish lender Bankia, and sovereignborrowing costs creeping up to dangerously high levels yet again.
“But there is a silver lining. Businesses have seen an increase in export orders in the lastquarter, despite concerns about the Eurozone. While the EU is our main trading partner, UKbusinesses are looking to trade in new markets.” He observed that, according to the latest figuresfrom the Office for National Statistics, more than half of British exports in the three months toMay went to countries outside the EU, an increase of 13% on the same quarter last year.
“These results are encouraging, but we need to find ways to make our businesses think global,and provide them with the support they need to break into new markets,” added Longworth. “Businesses are still concerned with being able to access the appropriate finance to help them tobreak into new markets. Export growth is vital, not only to help to boost the UK economy, but toshow the world that Britain remains a major global competitor and a nation to do businesswith.”
