Call for change in export support to navigate Brexit uncertainty

2nd November 2016

Poorly designed support to help SMEs to export is hampering business growth and must be tackled to navigate uncertainty created by Brexit, according to trade experts at Sheffield Chamber of Commerce.

The call from the Chamber and its South Yorkshire International Trade Centre (SYITC) follows the release of the latest British Chambers of Commerce (BCC)/DHL Quarterly International Trade Outlook, which indicates that uncertainty following the vote to leave the European Union is slowing down export orders in the services sector. The services sector saw a slowdown in growth, with the balance of businesses in the sector expecting an improvement in sales and orders also falling to its lowest level in five years. In contrast, the report found a greater proportion of manufacturers enjoying an improved export performance compared with the second quarter, with some benefiting from sterling's recent fall. This is also replicated in an improvement to the sector's future orders. The report's Trade Confidence Index, which measures the volume of trade documentation issued by accredited Chambers of Commerce, fell by 4.14% on the quarter following the surge of documentation issued before the EU referendum but remains 5.32% up on the same quarter of 2015. The results show that exports are expected to grow at a slower pace in the coming months, and confidence in turnover and profitability has also fallen in the medium term. Richard Wright, Executive Director of Sheffield Chamber, said: -The BCC is calling on the government to use the Autumn Statement to increase resources to directly support SME export plans, providing direct monetary support for firms to explore new markets or deepen sales abroad. -We're adding the city business region to this call as we are disappointed by the results and believe they are rooted in the UK's inability to support businesses to export properly. -The growth in exports for the whole country is not good enough and Sheffield City Region is at the bottom of the league tables with respect to year on year and quarter on quarter changes. -We are trading at a massive deficit and building debt and this must be our greatest long term worry as a nation and locally. -The Government and public sector have spent millions of pounds on export support over many years which have failed to show sufficient return on investment. We believe that is because export support schemes are too often a million miles away from commercially-led objectives. They are box-ticking, process-driven activities that focus on the wrong areas. -The Global Business Network - a partnership between the BCC, the Department for International Trade and the Foreign and Commonwealth Office - does, however, give us the opportunity to change things and we must not let the chance slip. Trade experts from Chambers across the UK as well as overseas markets gathered for the BCC Global Business Network conference in London earlier this month to coincide with the BCC/DHL report's publication. Nick Patrick, International Trade Manager at South Yorkshire International Trade Centre added: -Businesses don't measure how often a trade representative comes to see them or even how many times they do a training course. -They need direct introductions to customers who have live enquiries for their products and they can quote and turn into orders. What SMEs need are agents abroad but they can't afford to employ them, although are prepared to pay on results. -The BCC Global Business Network works like that. It has experts in local markets all over the world and employs an approach that works such as we have seen with local firm Polyseam Ltd. Polyseam Ltd has a business strategy to grow international sales around the world, reducing their reliance on national and European markets. They were introduced by the Chamber to a number of GBNs and have been working with them since to identify markets and generate enquiries for their products. Neil Smith, International Sales Director of Polyseam Ltd added: -In the past two years our export activity has increased from 25% to 70% of sales. A big part of this is due to the support of the BCC Global Business Network. -In our opinion this is a unique service with the GBNs being effectively a series of agents which we can use all over the world to identify enquiries and orders. SYITC does the rest with advice and help on specifics of trading in those countries to ensure shipments go smoothly and we get paid promptly. Nick added: -This is a great example of how the system can be changed to get positive results. -Neither are we supporters of 'speculative' trade missions unless the attendees already do business in the country and/or the GBN representative in the country can set up a proper itinerary with actual potential customers who have real enquiries. -Bringing Sheffield City Region businesses in contact with GBNs remains one of our highest priorities and during November we have organised a number events with them to make this happen. Upcoming GBN events organised by Sheffield Chamber of Commerce include: 4th November Global Business Network: South Africa & Turkey 10th November Global Busienss Network: Chile, Mexico and Columbia 30th November Global Business Network: India To book your place on these events visit www.scci.org.uk/events. To see the full Quarterly International Trade Outlook click here. For all International Trade enquiries email info@syitc.com