Santander’s inaugural Trade Barometer shows UK businesses are confident about exporting in the future despite economic uncertainty.
The UK’s business community is increasingly concerned about the external business environment, including Brexit, the health of the UK economy and the impact of the Trump administration, but remains confident about exporting in the future. This is the conclusion of the inaugural Santander Trade Barometer.
The barometer, based on the attitudes of businesses engaged in, or considering engaging in international trade, reports that 73% of this cohort are concerned that a UK economic slowdown will negatively impact their business in the next 12 months – an increase of 6% since April 2017.
John Carroll, head of international, Santander Corporate & Commercial said: “In the current uncertain environment, British businesses undoubtedly see increasing risks on the horizon. Yet we should not mistake concerns about the wider trade environment for a sense of pervading doom and gloom.
"The barometer showcases the resilience and confidence of our established and outward looking businesses. There is a clear desire from businesses to get out there and make the most of opportunities for growth.”
The research also showed…
Brexit joins concerns over the UK Economy and Trump Administration
These businesses are also increasingly concerned about the impact of Brexit, two-thirds (66%) now expect a negative impact on their business – an increase of 9 percent since April 2017, indicating a potential deterioration of business sentiment following the General Election and perceived progress on the negotiations with the EU.
UK businesses that are already trading internationally or aspiring to do so in the next 12 months, see themselves as the most vulnerable (69%).
Businesses are also increasingly concerned about the impact of the Trump administration – 42% expect a negative impact in the next 12 months - and it is those businesses planning on starting to trade internationally that are most concerned, with 61% expecting a negative impact – an increase of 27% since April.
Despite external risks, UK business confidence is strong
Almost 71% of Britain’s businesses are confident of growth in the next 12 months. Those businesses either currently trading internationally 72% or expecting to begin trading internationally in the next 12 months are especially confident 74%.
Looking back over an uncertain year, half (50%) of the UK’s existing international traders said that their business had improved (33% said it stayed the same). The most important factors behind improvement were success in winning new customers (61%) and benefiting from changes in the value of the pound (36%).
Skills and market access key to future UK trade growth
The UK’s internationally trading businesses are most likely to cite recruitment (49%), navigating economic conditions in new markets (43%), access to the right skills (42%), gaining access to emerging markets (31%) and bureaucracy (40%) as the top challenges to international trade.
Those UK businesses that are currently not trading internationally cite difficulties in securing reliable foreign representation to support sales (77%), challenges in identifying the opportunities available (77%) and their ability to contact potential new customers (70%), alongside the need to focus on building a strong UK domestic base (86%) as barriers to trading internationally.
Carroll added: “Realising the wider horizons of a global Britain means focusing on the essentials, as we look to a post-Brexit trade policy this means working to bridge the skills gap, cut trade-related bureaucracy and showcase opportunities, especially with those businesses that haven’t yet started trading internationally or in certain markets.”