SME Exporters Trapped In Doldrums

May 7, 2024

The Trade Confidence Outlook, conducted by the BCC’s Insights Unit, is a survey of more than 2,000 UK SME exporters.    

     

It shows the percentage of SME exporters reporting increased exports has been static since the pandemic, and has weakened slightly since the end of 2023. SMEs are less likely to report increased exports compared to before the pandemic and Brexit 

  

In Q4 2018, 28% of SME exporters reported an increase in overseas sales (4 points higher than Q1 2024) and 16% reported a decrease (7 points lower than Q1 2024).  

  

By contrast, domestic demand for SME exporters remains consistently more buoyant, with 35% reporting an increase in domestic sales Q1 2024, against just 24% for overseas sales. 

    

The proportion of businesses reporting decreased overseas sales began to rise in the run up to Brexit and has remained stubbornly higher ever since.     

   

The situation remains more volatile for SME manufacturers than other sectors, with 27% reporting an increase in exports, 46% no change and 27% a decrease.   

   

This compares to SME services exporters supplying end customers (B2C), where 22% saw an increase, 51% remained constant and 27% saw a decrease. Firms supplying services to other businesses (B2B) saw the most stable performance – with 22% reporting an increase in exports, 59% seeing no change and only 18% reporting a decrease. 

     

William Bain, Head of Trade Policy at the BCC, said:     

     

“The outlook remains fragile for 2024, notwithstanding forecasts of stronger global trade growth, due to ongoing geo-political uncertainty and growing concerns about the resilience of supply chains 

  

“There is also the spectre of further trade barriers with the EU, as the UK’s regulatory divergence increases.  

     

“But the UK’s brand and competitiveness remain strong, so we must lean more heavily into the advantages we possess. We are already a world-leader when it comes to digital trade, and we must continue to push for its wider uptake. 

 

“Business needs to work with Government to put in place a framework that makes use of all the advantages the UK has, to keep us at the top table, and to access incentives for our exports overseas.   

    

“We must also look again at fixing some of the growing trade barriers with the EU. It is still our biggest trading partner, but firms continue to express huge frustration with the complexity and costs involved.”