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British Exporters Keep Calm and Carry On

CP1 0147Last week (30th November), the British Chambers of Commerce, in partnership with DHL, publishes its latest Quarterly International Trade Outlook, based on survey and documentation data from UK exporters.

Manufacturing exporters, the responses show, have enjoyed strong sales and orders in foreign markets. In turn, domestic sales and orders have also improved. The Trade Confidence Index (the measure of the volume of trade documentation issued nationally) stands at 126.51, up 2.3% on the previous quarter and up 4% on Q3 2016.

The results of the survey indicate the price pressure from the cost of raw materials is high across the board for exporters (86% in manufacturing, 42% in services). 68% of exporting manufacturers consider exchange rates as a concern to their business.

Exporters are also more likely to have tried recruiting in the last three months. However, firms across the UK economy are struggling to find the right skills, with 70% of manufacturers and 57% of services firms reporting recruitment difficulties. Regionally, firms across the Black Country point to the recruitment of highly-skilled workers as potentially problematic for their businesses, following the national trend.

The findings suggest that the fall in sterling is increasing price pressure for businesses across the economy, but particularly in manufacturing. However, many of those businesses that export have been able to offset the fall in sterling thanks to timely improvements in sales and orders, both overseas and at home.

Commenting on the findings, Dr Adam Marshall, Director General of the British Chambers of Commerce (BCC), said: “While it’s encouraging to see many exporters reporting improved performance on the back of rising demand in key markets, including the Eurozone, price pressures remain a real cloud on the horizon for UK firms.

“The depreciation of sterling has undoubtedly benefited some firms, but has ratcheted costs up significantly for others. Taken together with higher domestic costs facing businesses, a tipping point may soon be reached for some firms – with consequences for investment, recruitment and trade.

“Many exporters are also being hampered by issues in the domestic business environment, most notably the widening gap between business skills needs and the pool of available labour. Trading businesses in some areas now say that there is a generalised labour shortage in their area, which could put a brake on their overseas activity if it is not addressed. This is a sobering reminder that the focus needs to be on the fundamentals here at home, as well as the high politics of Brexit and global trade policy.”

Stefan Szabo, Head of International Trade at the Black Country Chamber of Commerce, commented: “Despite the ongoing uncertainties surrounding the future post-Brexit, the underlying message of today’s release is, nonetheless, still encouraging.

“For the most part, the Black Country region’s exporters are still enjoying export sales growth in EU markets and most have benefitted from the substantial decrease in the value of Sterling against the major benchmark currencies. However, in many cases, that advantage has been lost or largely mitigated by substantial rises in the cost of raw materials or semi-finished goods that are necessary for the final product assembly. We also note our exporters concerns around the skills gap and access to suitably qualified foreign experts, where equivalent domestic resources are not available.”

The Black Country Chamber provides excellent International Trade support through a team of resident specialist advisers from the Department for International Trade. We want to encourage all existing exporters and those wishing to explore International Trade opportunities to contact us with any queries and requests for support.

For information please visit www.blackcountrychamber.co.uk/internationaltrade or call 0330 024 0820.

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