Thursday, April 22, 2021

Quarter of exporters to EU considering holding back activity, research finds

Although 44% of UK exporters to the EU plan to grow their exports to the bloc, nearly a quarter (23%) are looking to either reduce their activity in the EU or have no activity at all in the next 12 months, following the ratification of the UK-EU Trade and Co-operation Agreement.

According to the results of the latest British Chambers of Commerce survey, in partnership with moneycorp, two-thirds of UK businesses are looking to increase activity in the domestic market.

Fieldwork for the survey, which received 1,024 responses from UK firms overall, 466 of whom were exporters to the EU, was undertaken between 18 and 31 January 2021.

For UK exporters to the EU market, 44% said they plan to increase activity in the EU export market, 27% will consolidate rather than grow, 10% plan to have no activity in the EU, and 13% will decrease activity.

Overall, almost two-thirds (60%) of UK firms plan to increase activity in the domestic market. 28% said they will consolidate rather than grow, 2% said they have no plans to be active in the UK market, and 5% will decrease activity.

One-fifth (21%) of firms say currency risk is more of a concern than two years ago. Manufacturers (28%) are more likely to report concerns.

Domestic market

Overall, almost two-thirds (60%) of UK firms plan to increase domestic activity over the next twelve months. 28% said they will consolidate rather than grow, 2% said they have no plans to be active in their home market, and 5% will decrease activity.

UK manufacturers (68%) and B2B service sectors firms (63%) – such as finance, legal, or marketing firms – are more likely to expect to increase domestic activity.

B2C firms – such as hospitality, catering, and retail- are less likely to expect to grow in the UK market, with just over half (53%) of these firms planning to increase activity.30% planned to consolidate rather than grow and just under a tenth (9%) planned to decrease activity.

EU market

Under half (44%) of current UK exporters to the EU either have concrete plans for growth or intend to grow without concrete plans. 27% will consolidate rather than grow.

By contrast, nearly a quarter (23%) of UK exporters to the EU either have no plans for activity in the EU export market (10%) or plan to decrease their activity in the EU export market (13%) over the next twelve months.

This follows BCC research released on 11 February which found that 49% of exporters are facing difficulties adapting to changes in the trade of goods with the EU.

Non-EU market

For all exporters in the survey – those that currently export to the EU and/or rest of the world – 25% said they had concrete plans for growth for non-EU export markets, 27% had intentions to grow, 17% would consolidate rather than grow, 19% had no active plans to be involved in non-EU export markets, and 4% would decrease presence.

Currency risk

When asked if foreign currency risk is more or less of a concern to their business than two years ago, one fifth (21%) of firms said it was more of a concern. Only 7% said it was less of a concern, 36% said it was the same concern as two years ago, and 27% said it was neither a concern now nor two years ago.

Respondents in the manufacturing sector (28%) were more likely to report increased concern.

When asked whether businesses were taking steps to manage currency risk, overall only 9% of respondents were. However, that percentage increased to 19% for manufacturers.

While 37% of firms that are not managing risk cited little or no currency exposure:

  • 16% of respondents said the costs, fees, or premiums of financial products were too high
  • 14% of respondents said that there was a lack of information on the types of products or strategies with which to manage the risk;
  • 13% of respondents said they had contract restraints, e.g. with customers or suppliers which limited their ability to manage risk

According to research by moneycorp, many UK firms intend to consolidate or grow in non-UK export markets, yet GBP volatility remains high. With the pound strengthening by over 20% over against the dollar since March 2020, and 8% against the euro, meaning that if businesses were exchanging GBP 100,000, this would be a difference of USD 25,000 and EUR 9,000 respectively.

A message from the Editor:

Thank you for reading this story on our news site - please take a moment to read this important message:

As you know, our aim is to bring you, the reader, an editorially led news site and magazine but journalism costs money and we rely on advertising, print and digital revenues to help to support them.

With the Covid-19 pandemichaving a major impact on our industry as a whole, the advertising revenues we normally receive, which helps us cover the cost of our journalists and this website, have been drastically affected.

As such we need your help. If you can support our news sites/magazines with either a small donation of even £1, or a subscription to our magazine, which costs just £31.50 per year, (inc p&P and mailed direct to your door) your generosity will help us weather the storm and continue in our quest to deliver quality journalism.

As a subscriber, you will have unlimited access to our web site and magazine. You'll also be offered VIP invitations to our events, preferential rates to all our awards and get access to exclusive newsletters and content.

Just click here to subscribe and in the meantime may I wish you the very best.




Latest news

University of Sheffield spinout company raises £10m to advance stem cell therapy for hearing loss

University of Sheffield spinout company, Rinri Therapeutics, has raised a total of £10 million from investors and the UK Future Fund to advance its...

Progeny extends reach into Scotland with Affinity expansion

Progeny Group is continuing to extend its multi-disciplinary professional services into Scotland with the acquisition of Affinity financial planning practice. A five-strong team, Affinity was...

Bank of England to open to northern hub in Leeds

The Bank of England is set to open a new northern hub in Leeds as part of plans to bolster staff presence across the...

Rising distress for Yorkshire businesses despite gov support

Despite Government support measures designed to avoid mass insolvencies, businesses in Yorkshire and across the UK are experiencing rapidly escalating levels of distress. According to...

Business Revival Grant Fund to open for COVID-hit Lincolnshire businesses

Next week, City of Lincoln Council and West Lindsey District Council will launch a new Business Revival Grant Fund. The grant is aimed at supporting...

German ag machinery manufacturer relocates into £3m East Yorks premises

Grimme, a German manufacturer and supplier of agricultural machinery, has relocated into a £3 million purpose-built premises in East Yorkshire. The £45 million UK turnover...

Related news

Rising distress for Yorkshire businesses despite gov support

Despite Government support measures designed to avoid mass insolvencies, businesses in Yorkshire and across the UK are experiencing rapidly escalating levels of distress. According to...

UK recovery accelerates as number of sectors in growth mode hits 6-month high

The number of UK sectors reporting output growth rose to a six-month high in March, according to the latest Lloyds Bank UK Recovery Tracker,...

Yorkshire business launches tech security solution for hybrid workers

A solution using SD-WAN technologies to protect UK businesses from the overlooked security risks associated with hybrid working has been launched by an Elland-based...

7.5 million UK workers want to work from home permanently once lockdown restrictions lift

More than one in five UK workers (23%) - the equivalent of 7.5 million - is hoping to work from home all, or almost...

By continuing to use the site, you agree to the use of cookies. more information

The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.

Close