Posted by

Tom Nolan, Policy Adviser

24 Oct 2012

In conjunction with DHL, the global market leader in the logistics industry, we publish a report every three months based on the responses of over 1,500 exporters to a survey on their trading conditions. The report is launched today at the same time as the inaugural BCC International Trade Conference. The Conference will see top-flight politicians, business leaders and opinion-formers from across the country gather in London to discuss the opportunities and challenges facing exporters.

And the results of the survey show that exporters are facing a challenging time. Although the key indicators are all still in positive territory, which shows a welcome expansion, the results nevertheless point to weakening activity for exporting firms, with sales and orders balances down on the quarter. This downward movement for exports, domestic performance and weakening employment expectations indicate that exporters are operating in a difficult environment of continuing global uncertainties.

The significant increase in cash flow concerns for services is particularly disappointing; earlier this year other BCC research showed that the sensitivity of export performance to cash flow and access to working capital and unfortunately the situation hasn’t seem to have improved.

Despite these challenges, exporters do remain confident about increasing turnover and profitability over the next 12 months. Confidence remains firmly in positive territory for manufacturing and services exporters, with balances improving on the quarter. Other bright spots include falling cost pressures, improved domestic balances for manufacturing exporters and receding concerns about exchange rates. The fall in concerns about exchange rates is a slight mystery considering the recent strength of the pound. But this could be explained by a number of factors such as a delayed reaction by firms as they hedge against upward movements.

There is great potential for UK businesses in the exporting market but they do need further assistance from the government. In the report we call on the government to ensure there is swift and easy access to the new funding package announced to expand the Tradeshow Access Programme and to empower the Business Bank to originate loans and lend directly to businesses.