By Daniel Hunter
The latest DHL/BCC Trade Confidence Index report — which measures UK exporting activity (Export Index) and business confidence (Confidence Index) — shows that exporting activity is at its highest level since 2007.
Responses from more than 1,700 businesses show that export orders and sales have increased, with confidence levels in both future turnover and future profitability also remaining high. More businesses have taken on new staff in the second quarter of this year, with many expecting to hire further in Q3.
The index number, which is calculated from the volume of export documents issued to businesses by Chambers of Commerce, now stands at 118.12. This represents an increase of 2.85% on Q1 2013 and is 2.94% higher compared with the same quarter last year.
The key findings from the report are:
• Export orders for service sector businesses increased for 50% of firms to the highest figure on record. 44% of manufacturing firms increased their export orders resulting in the highest figure since Q1 2012.
• Nearly half of exporters (48%) said their export sales increased in Q2 2013, compared to 10% who said that they decreased.
• 42% of manufacturing firms reported an increase in export sales — up from 36% of firms in Q1. In the services sector, 52% saw export sales increase — up from 44% of firms in Q1.
• More than half of exporters (51%) believe that their profitability will increase this year, and 60% believe they will see an increase in turnover.
• Nearly a third of firms (31%) said that they expected to increase staff this year, up from 28% in Q1 2013.
• The number of businesses claiming that raw material costs were adding to price pressures fell from 42% to 33% in Q2 2013. However, when broken down by size, it appears that micro firms within the service sector are still experiencing price pressures, with 46% citing this as an issue compared with only 25% in the previous quarter.
“For the first time on record, these results are positive across the board. Export sales and orders have gone up, confidence is high and expectations around profitability have increased," John Longworth, Director General of the British Chambers of Commerce (BCC), said.
"Even more businesses have taken on new staff this quarter, with many expecting to hire again next quarter which is really encouraging. This is a tribute to UK exporters who are working tirelessly to drive growth and lead the economic recovery.
“But we mustn’t take our foot off the gas. We still need more companies to take the plunge on international trade and for those who export already, to try and diversify into new markets. For this to happen, businesses need real, on the ground support to help them take their goods and services overseas. We must seize this momentum and strive towards an economy that is more than just ‘ok’, but which is truly great and outperforms our competitors.”
Commenting on the report’s results, Phil Couchman, CEO of DHL Express UK and Ireland, said: "These historically positive results show how buoyant the SME spirit is, even in challenging times. But we must not lose sight of the reality, which is that not nearly enough small businesses in the UK
are even testing the waters of international trade.
"In order to encourage them, we must collectively smooth their path by providing local insight, guidance and global expertise, enabling them to sell their wares to the world. Currently, there are a number of opportunities for exporters within high growth markets - Croatia’s accession to the EU this month means increased opportunities for international trade due to the simplification of export and import customs legislation.
"Our exporters require support from the government, from trade bodies, and fellow businesses to invest in new markets, if they are to lead the country back to sustainable economic growth."
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