British firms aim to export more to grow their way out of recession but are slow to look beyondtraditional markets to new emerging economies, according to a UPS survey.
The vast majority of both non-exporters (90%) and exporters (81%) believe that increasingexports will be essential to the UK’s economic recovery, according to the joint study by UPS andthe Centre for Economics and Business Research (Cebr) which surveyed 1,200 UK product-basedexporting and non-exporting businesses.
As a result of difficult domestic trading conditions, nearly four-in-five (78%) non-exportingbusinesses are increasingly looking overseas for sales opportunities. About 80% of non-exporterssaid that starting to export will be critical to the future success of their business.
High-growth economies will be essential for future survival, growth and success, an overwhelming83% of exporters believe. Exporters expect the fastest growth in overseas demand to come fromCentral and Eastern Europe in the next 2-3 years (as identified by 30% of exporters), followed bythe Indian subcontinent (15%) and the Far East (15%).
But British firms are not yet fully capitalising on these emerging market growth opportunitiesand UK export growth lags significantly behind demand in the two fastest-growing BRIC exportmarkets – Brazil and Russia, according to the research.
The analysis also showed that only two of the UK’s top 15 export markets were emerging economies(India and China) in 2011, and the country remains heavily dependent on its traditional top fiveexport destinations: USA, Germany, Netherlands, France and Ireland. Dependence on these economieshas decreased only slightly in the past decade, down from 51.2% of all exports in 2001 to 44.6% in2011.
Exporters identified physical distance as the single greatest barrier holding them back fromselling more to high growth regions (as identified by 76% of respondents), followed by corruption(62%) and political instability (55%). A clear majority of exporters (85%) identified increasedease and reliance of transporting goods overseas as a key export enabler.
Non-exporters, meanwhile, identified transport and logistics risks (87%), regulatory issues(81%) and the initial capital hurdle (80%) as the top three barriers holding them back fromstarting to export.
Cindy Miller, managing director at UPS UK, Ireland & Nordics, commented: “There isclearly a huge appetite for offshore trading among UK producers, eager to defy gravity in toughhome trading conditions. Economic reality necessitates that businesses do more to take advantage ofexpanding markets in Asia and Eastern Europe, rather than rely on our traditional trading partnersin Western Europe and the US.”
She urged: “Exporters must try to overcome perceived hurdles to trading outside of theirgeographic comfort zones. By working with trusted logistics partners on the ground,businesses of any size can develop truly global supply chains.”
