By Maximilian Clarke
UK exports continue to grow, though the rate of growth has eased off over the last quarter as economic fragility within the Eurozone has delayed exporters’ plans to expand.
Figures from the second DHL/British Chambers of Commerce Trade Confidence Index, a new measure of the UK’s exporting health, shows a 3% boost in orders, though 1 in 4 expoerters have reported a decrease.
Over half of exporters that believed their turnover and profitability would improve over the next twelve months, though these figures fell slightly on the quarter. 55% of firms believed turnover would increase (down from 58% in Q2), and 16% believed it would decline (up from 12%). Confidence among exporters in increasing profitability fell slightly to 48% (down from 50%), while 24% (up from 22%) believed it would worsen.
Continued uncertainty around the resolution of the Eurozone debt crisis, and the fragility of the UK’s economic recovery means British exporters are reticent to take on more staff. Exporting firms’ plans to take on more staff in the next quarter are anemic. A fifth (19%) of exporters expect to decrease their workforce, the highest level since the third quarter of 2010.
“The UK’s exporters are still performing well, and the results of the Trade Confidence Index show the trend of growth in exports continues,” said John Longworth, Director General of the British Chambers of Commerce.
“However, uncertainty around the UK’s recovery combined with the eurozone crisis, means that growth has slowed in the last quarter. Order books have weakened, confidence in increasing turnover has softened and exporters’ desire to expand workforces is muted.
“There are some great examples of British small- and medium-sized businesses exporting goods and services across the globe, but we need more of them, and that relies on more support and trade finance. If we’re to see the rebalancing of the economy that we need for recovery, British businesses must be encouraged to take risks and seek out new markets, particularly those outside Europe. The Chancellor must use his Autumn Statement to deliver confidence to exporters, and encourage those looking to trade abroad for the first time to take the leap.”
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