Businesses who make the leap into international markets are reaping the rewards, according to an international trade survey being published today by the British Chambers of Commerce (BCC).
The results show that the majority of current exporters (59%) recorded sales growth in 2014, despite stagnation in the Eurozone and the appreciation of sterling. Furthermore, a third of exporters (34%) had to expand their production capacity last year to cope with demand from international markets, compared to only 3% that reduced capacity.
Despite the rewards on offer to all firms, it’s the long-established international players that are getting most of the benefits. Of the exporters that responded to the survey, the majority (61%) have been trading internationally for more than 10 years, compared to only 6% who have been exporting for up to two years.
Firms considering exporting suggested that greater access to overseas distributors and partners, and increased funding and support, would encourage them to seek out international markets.
BCC Director General, John Longworth said “we must redouble our efforts to grow a pipeline of new exporting companies that the UK economy so desperately needs”.
Key findings from the survey:
More businesses need to join the ‘export game’
- The majority of the exporters (61%) surveyed have been trading internationally for more than 10 years, while new exporters (0-2 years) account for only 6% of the sample.
- 89% of businesses have ambitions to grow domestically, however fewer than half of firms (44%) have ambitions to grow internationally.
Exporters stand to reap the rewards as they tackle additional markets
- The majority of exporting firms (59%) reported an increase in sales in the past 12 months, compared to 18% who said sales have fallen.
- A third of exporters (34%) had to expand their production capacity last year to cope with demand from international markets.
Firms face challenges when trying to export
- The most influential factor when considering exporting is the ease of finding customers, agents and distributors, according to the majority of firms (77%).
- Increased funding (26%) and access to overseas agents and distributors (20%) are identified as key factors that would encourage non-exporting businesses to export for the first time.
- Almost six out of ten (59%) non-exporters say they do not have the right product or service for export.
Commenting on the findings, John Longworth, Director General of the British Chambers of Commerce said:
“Firms willing to explore international markets reap the rewards on offer. It is encouraging to see some businesses exporting for the first time. But we need to redouble our efforts to grow the pipeline of new exporting companies and help more of our existing exporters to break into new markets. Together this will drive up our export performance and rebalance the UK economy.
“A long-term partnership between government and business can bring about a revolution in exports, encouraging more businesses to export for the first time and those already exporting to go further. We must make it easier for companies to consider trading internationally. By making exporting a bigger part of our business culture, we can build our collective appetite to trade. Increasing funding and improving market access for potential exporters will go a long way towards removing the perceived barriers for non-exporters, many of whom could be selling their wares overseas.
“As the election debate rages, Britain’s political parties have failed to set out how they will address the export challenge – and achieve the ambitious growth targets that the Prime Minister set out for 2020. Businesspeople want to work with the next government to implement ambitious plans that help Britain recapture its reputation as a premier trading nation. Only then will we eliminate the UK's stubborn trade deficit - and unlock future economic growth."
The BCC’s Business Manifesto:
A Business Plan for Britain has proposed a number of measures to assist first-time exporters, and to help existing exporters target new international markets:
- Continue to develop a world-class, global business-to-business network of British Chambers and business groups – linking British firms with customers and opportunities for growth in the fastest-growing overseas markets.
- Continue work to bring UK Export Finance up to par with the world’s best export finance agencies – ensuring UK businesses can access finance needed to seal deals in markets around the world.
- Reform the UK’s passport and visa system – to allow overseas British business people and their foreign counterparts to conduct trade activity with ease, boosting Britain’s export performance.
- Make foreign language learning compulsory from age seven to 16 – supporting more young people to ‘think global’, and acquire the knowledge and skills that are highly valued by Britain’s exporters.