Brexit is widening the horizons of businesses in the North. Mike Rowan, North Regional Manager of trade credit insurer Atradius, talks about the impact so far, and thriving in the future.
This time last year, few people would have predicted the volatility that defined 2016. The result of the UK’s EU referendum sent shockwaves through the nation and whilst business-as-usual has largely been reestablished, North businesses are still working to get to grips with the potential repercussions for trade in the post Brexit environment.
While the UK remains in the EU for the present, predictions are rife about what a split will mean and how trade will be impacted. The uncertainty has already sent ripples of negativity through the economy and North businesses have new risks and challenges to face.
Early reactions have seen the UK credit rating downgraded and sterling has dropped against major global currencies. Some economists have predicted that GDP, a key indicator of economic growth, could fall over the next two years, with consequent adverse impacts for the business environment. The rate of business failures is closely linked to developments in GDP, so a deterioration in economic growth is likely to herald a rise in the number of insolvencies.
Perhaps more positively for growth, concerns about Brexit have begun to widen the horizons for our local exporters. Europe has long been an attractive trade partner due to its close proximity and EU trade agreements. However, opportunities exist across the globe and the horizons of North businesses should not be limited by geography.
‘Made in Britain’ is an attractive brand in many overseas markets and the devaluation of the pound currently enables North exporters to compete financially with other suppliers. North firms are well placed to realise growth by going global, capitalising on their products and services being perceived as more affordable. Forward-thinking companies could see orders increase from existing business, as well as new opportunities from new customers in new territories
New opportunities need not be at the expense of European trade, but rather such activity will extend the scope of UK export. However, whether the sales territory is new or familiar, there are always risks, and Brexit, with all that it entails, is simply another risk to manage. North businesses need to remain alert to the range of risks that might affect successful trade and ensure that they are adequately protected in order to futureproof themselves against any prospective loss – whether due to insolvency, currency fluctuation, bad debt or changes to the trade relationship.
A decline in confidence and the subsequent increasing uncertainty in the economy has a knock-on impact on the trading landscape. However, keeping trade links open is key to stimulating the economy and vital for future success. With the right strategies, risk savvy businesses in the North can adapt and continue to thrive and not let the changing trade environment inhibit their ambitions for growth.