Confidence among exporters remains high, but mixed fortunes suggest challenges remain

3rd May 2013

Exports index rises 0.

95% in Q1 2013 but falls 1.5% on Q1 2012 Confidence among exporters remains high, but is slightly down on the previous quarter SMEs experience uplift in their export orders, compared to businesses of other sizes Businesses more likely to take on new staff than in Q4 2012  The latest DHL/BCC Trade Confidence Index report which measures UK exporting activity (Export Index) and business confidence (Confidence Index) shows that confidence levels in future turnover and profitability remain high, but there was a slight fall from Q4 2012. Overall, the index number used to calculate the volume of trade documents required of all businesses exporting outside the EU, now stands at 114.84; this represents an increase of 0.95% on Q4 2012 and is now the second highest since records began three years ago, although if compared to the same quarter in 2012 the figure is 1.49% down. Responses from more than 1,800 firms reveal that export orders and sales fell when compared to Q4 2012, however when broken down the services sector fall was marginal compared to the manufacturing sector. There was also a small increase in the number of businesses planning to take on new staff, particularly within medium and larger firms. The key findings from the report are:  Over one-third of exporters (41%) said their export sales increased in Q1 2013, compared to 14% of respondents, who said that they decreased; In the services sector, export sales increased for 44% of firms, down from 46% in Q4 2012. In manufacturing, export sales increased for only 36% of firms, down from 45% in the previous quarter; Small firms' order balances increased by 2% and medium firms' order balances increased by 11%. Larger firms however reported a fall of 10% and micro firms a fall of 3%; 59% of exporters feel that their turnover will increase throughout 2013. 50% believe that their profitability will improve in 2013; More than a quarter of firms (28%) said that they expected to increase staff this year, up from 27% in Q4 2012.  Commenting, John Longworth, Director General of the British Chambers of Commerce (BCC), said:  -Although the manufacturing sector recorded a sharp fall in exports, the UK's larger services sector continues to drive overseas trade. Optimism remains high amongst the UK businesses I visit week in, week out, who are determined to grow, create wealth, and break into new and fast-growing markets abroad, in spite of the continued risks facing UK exporters. -These results are a mixed bag, and reflect the challenges still being faced by those trading internationally. We need more companies to take the plunge and start exporting and to do this they need support from government, particularly through investment in trade promotion. If we are to win the 'economic war' that the Prime Minister has described on numerous occasions, we need both a more enterprise-friendly environment and a large-scale increase in the resources and attention dedicated to supporting international trade. Commenting on the report's results, Phil Couchman, CEO of DHL Express UK and Ireland, said:  -It's really encouraging to see SMEs forging the way for British businesses overseas, particularly in this time of economic uncertainty. -The Export Index shows there are clearly still opportunities for British businesses to expand into overseas markets, as it remains at historically high standards, a fundamentally positive indicator. -As the eurozone crisis continues to erode both business and consumer confidence, those businesses that are looking to trade internationally should be taking advantage of the potential of Asia and emerging territories. The government has estimated that by 2030, Asian consumers' spending is expected to be around 32 trillion dollars annually or about 43% of worldwide consumption a major opportunity for businesses of any size.

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