Over 5,000 UK companies paused exporting plans in 2016 as a result of the Brexit referendum result.
That’s according to research released last month by academics at Cambridge, whose report also suggested that nearly 4,000 companies actively stopped exporting over uncertainty surrounding future trade rules and border taxes.
Academics Meredith Crowley, Oliver Exton and Lu Han predict that the resultant pause or cease of export activity from the combined 9,000 firms took 1% off Britain’s exports for the year, more concerning with the potential for those exporters to have become major international sellers as new markets and agreements were explored.
“We estimate that the decline in entry reduced the value of exports by between £226m and £1.4bn in 2016, a small total value relative to total exports to the EU in 2016 of £140bn.”
How to balance Brexit export fears with growth plans
The big question facing UK companies that are either planning to start selling abroad or already current are is, what do we do next?
With the torrid nature of current negotiations taking place in Brussels and the various levels of hard and soft Brexit’s potentially on offer, you can see where the 9,000 businesses deciding to retain what they have instead of pushing for international growth are coming from.
There are three potential trains of thought that business heads can ponder;
- Retreat and retain
- Keep calm and carry on
- Accelerate global growth plans
Retreat for the businesses noted in the Cambridge report was the clearly the winning (whilst losing) option on the table.
What business owners need to remember is that the EU want a deal, and EU businesses want to trade with UK companies. Only last month we wrote about another report highlighting how demand for British food and drinks products are surging – up 10% in just 12 months.
For those leaning towards the keeping calm and pressing on line of thinking, it’s also worth noting that total exports last year reached a record £616bn. If your competitors are losing their nerve and leaving the export market, particularly within the EU block, that’s one huge opportunity just waiting for you to sweep in and take.
And for ambitious firms looking to grow through the potential pot-holed road ahead, British exports to non-EU states are on the rise and demand is growing, with International Trade Secretary Liam Fox noting that: “British goods remain in global demand as exports to non-EU countries continue to grow.
“It shows the confidence the world has in our goods and is important as 90% of growth in global trade will come from outside the EU.”
Getting the right support
There is no doubt about it, BREXIT is going to be a challenge for all EU companies that export either from the UK or into the UK. The simplicity of the Single Market and Customs Union has been taken for granted and there is a generation of business people out there which has never experienced the headaches of customs declarations, duties, VAT payable on import, deferment numbers, apostilles, Chamber of Commerce attestations.
Go Exporting’s Brexit consultancy can help you navigate the minefield. Find out more about our Brexit consultancy.