By Neil Kuschel, Director of Sales, DHL Express
Despite a record narrowing of balances in October, the Office for National Statistics’ (ONS) trade figures for November have highlighted a weakening in the export market, with the deficit in trade in goods and services rising to £2.6 billion in late 2011.
The worsening global economic crisis has created less than favourable trading conditions over the last 6 months, with figures indicating that exports were 1.7 per cent lower than those recorded in October. However, a number of trading opportunities do still exist in international markets and businesses should be encouraged to seek out new markets to trade with in order to facilitate domestic growth.
We’re not alone
Exporting data released by the Chinese government at the end of 2011 indicates a weakened picture for exports. In order to rebalance its trade surplus, China plans to boost imports from the West. This is a great opportunity for established UK businesses to boost their exports and smaller businesses to begin trading internationally as greater demand for a more varied range of products and services becomes apparent. Reciprocal import/export deals with China will benefit both markets and will serve to further strengthen the UK’s relationship with this thriving nation.
However, there are a number of factors that need to be considered before starting to export to China so support must be provided to small businesses if they are to capaitalise on this opportunity and help grow UK export sales. Trade missions to help UK businesses initiate trading relationships with this nation would be a welcome move this year.
Think outside the BRIC
Everyone is aware of the BRICs (Brazil, Russia, India and China), whose economies could become larger than those of the world’s six most developed countries in less than 40 years’ time. However, while the BRIC nations hold great potential for UK exporters, emerging markets may also still provide opportunities.
As an international company, DHL constantly monitors the economic landscape to identify global growth areas. Quite simply, we need to make sure we’re operating wherever our customers need us. In doing so, we’ve identified great growth potential in markets such as Asia, Latin America and Mexico.
UK exporters should look to investigate these nations as potential targets for growth, given our predictions. Issues to consider could include current rates of inflation, currency and customs charges, along with analysing demand for your product or service and the accessibility of trade routes in these markets in order to make the journey to trading with this market much smoother.
The initiation of trading partnerships, such as that announced in late 2011 with New Zealand can help make the decision to expand less daunting for businesses. Trading agreements offer the reassurance of regulation and take away the element of unknown for first time exporters, so the introduction of new agreements in the coming year could offer a much-needed confidence boost to UK businesses.
There is a great deal of support available for UK businesses looking to start trading internationally, regardless of a pre-existing trading agreement. DHL Express are experts in international shipping and offer guidance to SMEs who are considering targeting the global marketplace through export services, including insight into customs rules and regulations that might affect your business plan.
The UK Trade & Investment (UKTI) has many different services for UK businesses looking to export, including the (Overseas Market Introduction Service) which allows businesses to use the services of the UKTI’s trade teams, located in different places overseas. The British Chambers of Commerce (BCC) offers training services, export communications reviews, and support around export documentation.
New opportunities for UK businesses to expand their operation globally are ever-present. However, we must all support businesses in identifying these potential new markets if we are to regain our place as a powerful global trading partner and increase export sales in this critical year.
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