New data has highlighted how a range of global economic factors are hampering growth efforts for small and medium-sized exporters.
Data from more than 2,300 UK SMEs as part of the British Chamber of Commerce’s quarterly Trade Confidence Outlook for Q4 found that just one in four had seen international sales growth at the backend of 2022, with a further 47% saying sales had stagnated if not fallen.
The picture for 2023 looks equally stagnant too with 28% expecting a sales slump against 24% saying they could see an increase in demand.
Total revenues are expected to rise though as cost pressures and shrinking margins mean 64% of respondents are planning to increase pricing over the coming months.
Difficult business environment
Consumers and businesses alike have struggled in the post-pandemic era to really kick on once more with the cost of living, inflation and economic headwinds driven by the war in Ukraine contributing to a trading environment some are finding more difficult than during the lockdowns.
Additional factors such as Brexit have made it tougher, and more expensive, for UK firms in particular to access the EU market.
Respondents to the BCC survey noted that energy (72%), labour (67%) and raw materials (61%) were the biggest cost pressures being faced – three critical areas that it’s hard to mitigate against.
Head of policy at the Chamber, Willian Bain, said of the survey results that: “Last autumn the World Trade Organisation forecast global trade growth of just 1% in 2023, down from 3% in 2022. This is creating huge headwinds for smaller UK firms battered by the pandemic, Brexit and energy price shocks.
“Against this background, it could be some time before the global shipping and trading systems return to anything approaching normality.
“The UK government cannot afford to sit idly by as we head into such uncertain trading conditions. It must throw a lifeline to our struggling exporters who are desperately trying to keep their heads above water.”
Download now: 7 key changes to UK-EU trade post-Brexit
Bain continued: “Outside of the EU, the US is our biggest trading partner, and the one that BCC members are most interested in, yet progress on free trade talks are stalled. As the Good Friday Agreement anniversary looms the UK has a golden opportunity to transform our trading relationship with our two biggest export markets in one fell swoop.
“Other measures Government should consider include providing effective end-to-end trade finance and setting up a trade accelerator – by working alongside our global network to help firms enter new markets and maximise sales.”