UK small and medium-sized enterprises (SMEs) are increasingly looking to export goods and services, with pre-referendum investment in exports reaching a two year high.
Findings from the Q2 research, undertaken in June ahead of the EU referendum and shown in the graph above, show the proportion of businesses investing in overseas trade increased to 12%– more than double that in Q3 2015 and the highest since the start of 2014, according to the latest SME Confidence Tracker report from, Bibby Financial Services (BFS).
Commenting on the findings, Mark Lindsay, Managing Director of Trade and International at BFS said:
“Even before the referendum, an increasing number of UK businesses were eyeing-up opportunities in overseas markets…Though much talk prevails about the challenges businesses face in the wake of the referendum, there are also opportunities. With a weaker pound, many SMEs – particularly those who manufacture or source components from within the UK – are looking to increase export volumes with customers overseas.”
However, the report did also reveal an overall drop in investment intentions across businesses, with over a third (39%) of SMEs not looking to invest over the next three months. For more than a quarter (27%), the uncertain economic environment in the UK was the reason for not investing in Q2.
Just under a quarter (24%) of SMEs were focusing on building up cash reserves rather than investing and a fifth (20%) were holding back from investing because of declining sales.
However, Mr Lindsay says that BFS has seen an increase in enquiries relating to export and trade finance and currency exchange support since the referendum, adding that “We’re seeing business owners either looking to ramp up export quantities while exchange rates are favourable or – for those importing goods - protect themselves against further currency volatility.”
So SMEs appear to be making the most of any opportunities that Brexit brings. One such small business doing just that is Ming Foods, a Kent-based Chinese-food manufacturer. CEO Sam Duong, remarks: “As an SME we have to get on with making the most of opportunities springing from Brexit. Thankfully exporting is part of our business and the currency movements have made that easier; our exports are up 10 percent since the referendum.”
Ultimately there appears to be more positives for UK businesses coming from Brexit than expected, and SMEs are making the most of what they can.