By Daniel Hunter
British small to medium sized enterprises (SMEs) relying on exports to drive growth — and with it, create new jobs — are anxious for the government to better accommodate their needs and develop policies with wider-reaching industry benefits, according to a recent survey conducted by Smart Currency Business.
Less than half of those businesses surveyed (41.2 per cent) said they were confident or very confident in the Coalition government's ability to steer the British economy through the economic recovery. A further 22.9 per cent were uncertain about the government's prospects for success.
Additionally, a meagre 10.8 per cent expected to directly benefit from the Government's proposed business bank that was announced in September.
When asked specifically about exporting and whether the government could be more helpful to the industry, more respondents agreed (56.9 per cent) than disagreed (43.1 per cent).
“These results clearly suggest that more could be done to support exporters, however the industry is also concerned with the government's ability to cope with the pressures facing the economy as a whole. Respondents also appear concerned that government policies, such as the business bank, are missing the mark for the majority businesses,” said Smart Currency Business Director, Carl Hasty.
Unsurprisingly, manufacturing outweighed the service sector by a ratio of two-to-one as the number one driver of export growth, with 67.9 per cent believing the survival of British exports lies in manufacturing — a welcome response for the UK's eight million plus workers employed by local manufacturers and engineering firms.
However, the results were different than expected when it came to funding options, and whether businesses would benefit from more flexible funding alternatives in order to drive growth. While the overwhelming majority (69.9 per cent) agreed with the statement, one-in-five respondents (20.5 per cent) were uncertain as to whether flexible funding would indeed make a discernible difference.
This may be because other factors are of more concern to UK exporters at present. Exposure to exchange rate fluctuations, for example, was cited by 65.1 per cent of respondents as a deterrent to some UK companies entering foreign markets.
“I believe this fear demonstrates just how poorly the big banks are serving their business customers, particularly SMEs," Mr Hasty said.
"Between their excessive transfer fees, poor exchange rates and lack of available information on managing the risks of currency transfers, the banks are leaving businesses at the mercy of the currency markets.
“At Smart Currency Business, we tailor risk management strategies for our clients to help alleviate these concerns. One aspect of this is forward contracts, which enable businesses to fix their rates as a form of insurance against possible negative currency movements wiping out their margins. There are better alternatives available for British exporters to help improve the efficiency and profitability of their business dealings abroad.”
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