The UK’s business community is increasingly concerned about the external business environment, including Brexit, the health of the UK economy and the impact of the Trump administration, but remains confident about exporting in the future. This is the conclusion of the inaugural Santander Trade Barometer.
The Barometer, based on the attitudes of businesses engaged in, or considering engaging in international trade, reports that three quarters (73 per cent) of this cohort are concerned that a UK economic slowdown will negatively impact their business in the next 12 months – an increase of six per cent since April 2017.
John Carroll, head of international, Santander corporate and commercial, says, ‘In the current uncertain environment, British businesses undoubtedly see increasing risks on the horizon. Yet we should not mistake concerns about the wider trade environment for a sense of pervading doom and gloom. The Barometer showcases the resilience and confidence of our established and outward looking businesses. There is a clear desire from businesses to get out there and make the most of opportunities for growth.’
Brexit joins concerns over the UK economy and Trump administration
These businesses are also increasingly concerned about the impact of Brexit, two-thirds (66 per cent) now expect a negative impact on their business – an increase of nine per cent since April 2017, indicating a potential deterioration of business sentiment following the General Election and perceived progress on the negotiations with the EU.
UK businesses that are already trading internationally or aspiring to do so in the next 12 months, see themselves as the most vulnerable (69 per cent).
Businesses are also increasingly concerned about the impact of the Trump administration – 42 per cent expect a negative impact in the next 12 months – and it is those businesses planning on starting to trade internationally that are most concerned, with 61 per cent expecting a negative impact – an increase of 27 per cent since April.
Despite external risks, UK business confidence is strong
Almost three quarters (71 per cent) of Britain’s businesses are confident of growth in the next 12 months. Those businesses either currently trading internationally (72 per cent) or expecting to begin trading internationally in the next 12 months are especially confident (74 per cent).
Looking back over an uncertain year, half (50 per cent) of the UK’s existing international traders said that their business had improved (33 per cent said it stayed the same). The most important factors behind improvement were success in winning new customers (61 per cent) and benefiting from changes in the value of the pound (36 per cent).
Skills and market access key to future UK trade growth
The UK’s internationally trading businesses are most likely to cite recruitment (49 per cent), navigating economic conditions in new markets (43 per cent), access to the right skills (42 per cent), gaining access to emerging markets (31 per cent) and bureaucracy (40 per cent) as the top challenges to international trade.
Those UK businesses that are currently not trading internationally cite difficulties in securing reliable foreign representation to support sales (77 per cent), challenges in identifying the opportunities available (77 per cent) and their ability to contact potential new customers (70 per cent), alongside the need to focus on building a strong UK domestic base (86 per cent) as barriers to trading internationally.
Carroll continues, ‘Realising the wider horizons of a global Britain means focusing on the essentials, as we look to a post-Brexit trade policy this means working to bridge the skills gap, cut trade-related bureaucracy and showcase opportunities, especially with those businesses that haven’t yet started trading internationally or in certain markets.’
Further reading on businesses confidence
