By Daniel Hunter

The latest DHL/BCC Trade Confidence Index report - which measures UK exporting activity and business confidence - shows that businesses’ confidence about future turnover and profitability is at a two year high, and exports are at their third highest level since the DHL/BCC index report began in 2010.

Responses from more than 1,500 firms reveal that export orders and sales increased for both manufacturing and service firms in the fourth quarter of 2012. The index number used to calculate the volume of trade documents, administered by Chambers of Commerce across the UK, now stands at 113.75; this represents a 1.4% increase on the previous quarter and 5.2% increase on the previous year. However, the down-side, is there was a decline in the number of businesses planning on taking on new staff this year.

The key findings from the report are:

- Nearly half of exporters (45%) said their export sales increased, compared to 13% of respondents, who said that they decreased;

- In the service sector, export sales increased for 46% of firms, up from 42% in Q3; in manufacturing, export sales increased for 45% of businesses, up from 34% in Q3;

- 59% of exporters feel that their turnover will increase in 2013. 50% believe that their profitability will improve in 2013;

- More than a quarter of firms (27%) said they expected to increase staff this year, down from 31% in Q3

“It’s encouraging to see Britain’s exports continue to grow thanks to the ambition and talent of UK businesses, despite the continued challenges they face," John Longworth, Director General of the British Chambers of Commerce (BCC), said.

"This optimism is a true reflection of the businesses I visit week in, week out, across the UK who are determined to grow, create wealth and break into new and fast-growing markets overseas.

"The BCC is currently working alongside UKTI to transform the way support is provided to UK exporters, particularly smaller firms, with Chambers of Commerce in the UK and overseas playing an enhanced role in the delivery of crucial trade services to UK exporters.

“But we mustn’t be complacent about the health of our export sector, as there is always a danger that it could be choked off through a lack of working capital to fulfill orders. The much-needed re-balancing of exports is underway, but for it to really have an impact in boosting the economic recovery, it needs to happen faster.

"We need more companies to take the leap and export for the first time, and to do this, they need the right support from government. Expanding trade promotion budgets is a good start, but the introduction of a dedicated Export Voucher scheme would give businesses on the cusp of exporting the advice and support they need to take this crucial step towards boosting our economic recovery.”

Commenting on the report’s results, Phil Couchman, CEO of DHL Express UK and Ireland said: “This positive upturn in terms of exports and confidence serves as encouragement not only for those who are already trading internationally, but also for those smaller businesses who are getting ready to export for the first time. As a global business, we know that there are countless opportunities on the horizon for British made goods.

“In this report, we’ve identified Australia as a key market to enter. Prospective exporters can enjoy the benefits of a shared language, a similar culture, and Australia’s close proximity to Asia Pacific. For many sectors including fashion, this territory has fantastic potential.”

“In the meantime, we must put more support in place to assist businesses that aren’t already making their mark internationally. Collective steps must be taken by all of us, businesses and the Government alike, if UK exporters are to succeed.”

‘Open to Export’ is a UK Trade & Investment (UKTI) initiative in partnership with hibu plc (formerly Yell Group).

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