Exporters in the West Midlands remain optimistic about their 2018 trade prospects with a net balance of 38% expecting overseas sales to increase over the next six months.
This is according to the latest Business in Britain report released by Lloyds Bank for January 2018.
The news comes on the back of a strong end to 2017 in which a net balance of 40% of exporters saying their international trade had increased in the second half of the year.
More than two in five (44%) of West Midlands businesses currently export their goods or services – above the national average of 40% but down from 50% six months ago.
While some are facing new challenges, with 38% of West Midlands exporters deciding to focus more on UK sales in light of Brexit, most are optimistic about what lies ahead.
Tim Hanley, area director for global transaction banking at Lloyds Bank Commercial Banking, said: “The majority of West Midlands exporters still see international trade playing an important role in their plans, despite the continued climate of domestic and international uncertainty.
“Judging from West Midlands firms’ export performances over the previous six months, this confidence is not misplaced and by using international trade as a growth strategy for their business firms in the region can also manage risk during periods of uncertainty.”
The Business in Britain report, now in its 26th year, gathers the views of more than 1,500 UK companies, including 113 in the West Midlands, and tracks a range of performance and confidence measures.
Among West Midlands firms as a whole, 32% say the biggest barrier to exporting is exchange rate uncertainty, followed by tariffs and quotas.
Based on their current overseas trading, the current top three most popular partner countries for West Midlands firms are the USA, France and Germany, with 32%, 20% and 12% of companies exporting to these countries respectively.
Looking ahead, exporters in the region expect the biggest opportunities for international trade to come from countries outside the EU, with the USA (24%), China (16%) and India (10%) being most popular.
Tim Hanley continued: “West Midlands exporters continue to see the trade market in the USA as the promised land as they look to pre-emptively tackle the impact of a potential loss of access to the EU single market.
“Given the familiarity of UK businesses with the products and culture of the USA and the fact they are primarily English-speaking, it is understandable that this is a key target for West Midlands exporters.
“However, it’s encouraging to see that exporters are not neglecting the opportunities offered by emerging markets.
“Trading overseas can feel intimidating, but with the fall in the value of the pound making a lot of British exports more attractive overseas I’m certain that there are many opportunities for West Midlands exporters to prosper globally with the right support.
“Lloyds Bank is here to help, and our strategic partnership with the Department for International Trade as well as teams of West Midlands-based relationship managers can provide the kind of insight, support and introductions that can be invaluable to firms setting out on, or expanding, their export journey.
Ian Harrison, director of Exports at the Department for International Trade in the Midlands, added: “Many businesses across the West Midlands recognise the strong international demand for British products, and it’s hugely rewarding to see this reflected in the results from Lloyds Bank’s latest Business Confidence survey.
“Despite a positive picture overall, slightly fewer firms are exporting compared with six months ago.
“Very often this is because businesses don’t know where to start, and that’s where DIT can help them through the first stages of exporting.
“As part of our Exporting is