UK SME exporters continue to operate in challenging market conditions, as overseas trade opportunities have been hampered by negative economic pressures globally.
The British Chamber of Commerce’s (BCC) quarterly Trade Confidence Outlook for Q4 2022 surveyed over 2,300 British SMEs, posing questions pertaining to their business operations.
The results present overwhelming evidence pointing to ongoing financial difficulties, as costs steadily rise and margins are repeatedly squeezed.
Significantly, SME business owners are facing mounting costs for labour, raw materials and utilities.
Although there are some businesses confident of increasing profitability over the coming 12 months (36%), a similar proportion of UK SME exporters (35%) expect declining profits for the same time period.
Commenting on the survey results, Head of Trade Policy at the British Chambers of Commerce, William Bain said: “Last autumn the World Trade Organisation forecast global trade growth of just 1% in 2023, down from 3% in 2022. This is creating huge headwinds for smaller UK firms battered by the pandemic, Brexit and energy price shocks.
“China’s sudden full reopening may also create additional supply chain turbulence this year, should the Covid pandemic continue to impact health and economic output.
“Against this background it could be sometime before the global shipping and trading system returns to anything approaching normality.
“The UK government cannot afford to sit idly by as we head into such uncertain trading conditions.
“It must throw a lifeline to our struggling exporters who are desperately trying to keep their heads above water.
“Despite recent very welcome progress on data sharing, the unresolved Northern Ireland protocol situation is still influencing the UK’s relationship with the EU and the US.
“Resolving the remaining protocol issues unlocks the potential for benefits for UK businesses in both east and west directions, as well as for Northern Ireland.
“Outside of the EU, the US is our biggest trading partner, and the one that BCC members are most interested in, yet progress on free trade talks are stalled.
“As the Good Friday Agreement anniversary looms the UK has a golden opportunity to transform our trading relationship with our two biggest export markets in one fell swoop.
“Other measures Government should consider include providing effective end-to-end trade finance and setting up a trade accelerator – by working alongside our global network to help firms enter new markets and maximise sales.”
Paul Slevin, Executive Chair of Chambers Wales South East, South West and Mid, said: “The results of the BCC’s Trade Confidence Outlook and our quarterly economic survey reveal the challenges exporters continue to face and the consequent impact of these factors on business confidence.
“The war in Ukraine, Brexit and China’s reopening after rolling lockdowns may contribute to additional supply chain volatility this year and it could be some time before global shipping and trading systems return to normality.
“Amid such uncertain trading conditions, governments must do their part to help SME businesses to turn their fortunes around… We need a clear strategy to build and sustain trade volumes.”
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