Exports holding up – A new survey of UK exporters has suggested that overseas trade remains reasonably robust.
The survey, by the British Chambers of Commerce (BCC), covered a thousand firms and indicated that the second quarter of 2011 saw a 3.6 per cent increase in export sales compared with the same quarter last year.
The balance of exporters that believed their turnover and profitability would improve over the next twelve months also improved in the second quarter of 2011. Firms’ confidence in increasing turnover rose from +41 per cent to +46 per cent, and their confidence in increasing profitability rose from +17 per cent to +28 per cent.
Yet uncertainty around the Eurozone debt crisis and the fragility of the UK’s economic recovery meant that British exporters are reticent to invest and take on more staff:
Exporters’ intentions to invest in plant and machinery have recovered slightly since the recession, but they still remain weak by long-term standards (+9 per cent). Similarly, exporting firms’ plans to take on more staff in the next quarter are relatively weak, In manufacturing the balance is +4 per cent and in services +13 per cent.
Commenting on the findings, David Frost, Director General of the British Chambers of Commerce, said: “There is a disconnect between the strong performance of exporting firms and their lack of confidence when it comes to investing and creating jobs.
“An uncertain economic outlook, with concerns surrounding Eurozone debt and a fragile UK recovery, means many businesses are holding back on investment decisions – despite seeing strong export sales and orders in recent months. Cashflow is still a real problem for exporters, particularly smaller firms, and the results show that there are regions of the UK that lag behind when it comes to exporting outside the EU.
“The UK’s economic recovery relies on exporting and investment. Government must help British business to have the confidence to export and invest – and ensure that support schemes designed to help new and growing exporters are easy to access and easy to understand.”