Exporting seen as key route to growth, with Europe still a key market

Exports are an integral part of growth for many companies in the Northern Powerhouse region.

New research published today (June 28) shows that exporting is high on the agenda of most ambitious boards.

A report by Alibaba Group UK, in partnership with the Institute of Export and International Trade, polled more than 3,000 businesses across the UK and found that 74% of businesses across the Northern Powerhouse area are currently exporting.

Two thirds (66%) of business owners in the Northern Powerhouse surveyed expect their export sales to increase in the next 12 months and 77% of businesses in the region said exporting had boosted their revenue.

Manchester and Liverpool were revealed to be top export spots in the region, at 82% and 84%, respectively, and 81% of businesses in Sheffield expected export to increase in the next year, coming out as one of the survey’s top cities in the UK for positive export outlook.

Beyond the economic benefits of exporting, the research from Alibaba indicates the far-reaching positive impact on Northern Powerhouse-based businesses:

• Exporting businesses are also more resilient, with 79% of businesses saying exporting had made their business stronger
• 80% of respondents said exporting had fuelled innovation within their companies
• 79% of businesses said they had increased their headcount as a result
• 78% said exporting had relieved the pressure of doing business in the UK

When it comes to export markets, businesses in the Northern Powerhouse are looking close to home.

A third (33%) regard the UK’s nearest neighbours in the European Union (EU) as the market which presents the biggest export opportunity. Looking to future growth, North America (29%) and Asia (25%) present the biggest opportunities.

Despite the positive outlook, many businesses perceive challenges that could stand in the way of their export ambitions. The top five biggest export barriers cited by Northern Powerhouse businesses are:

• Supply chain and logistical issues (22%)
• Fully occupied by the domestic market (20%)
• Increased paperwork and red tape (20%)
• Regulatory barriers (19%)
• Economic uncertainty (19%)

For businesses focused on international growth, 68% of those surveyed are currently using online marketplaces to boost their export sales. More than a third (35%) started working with a marketplace during the pandemic, with the pandemic providing a strong impetus for businesses to adopt digital tools.

Roland Palmer, general manager of UK, Nordics & the Netherlands, Alibaba Group, said: “Our research suggests that Northern Powerhouse-based companies are seizing the enormous global export opportunities which exist across the world. The export success of the Northern Powerhouse is clearly driven by the outstanding quality and heritage of its local goods.

“Through international trade, even small businesses have the opportunity to grow, in turn generating more jobs and contributing to economic growth. Once a business begins exporting, they quickly recognise that the advantages outweigh the initial obstacles and they grow in confidence.”

Marco Forgione, director general of the Institute of Export and International Trade, said: “This research confirms what we have long known – that exporting firms are more sustainable, profitable and resilient – but also sheds light on some of the many challenges that prevent businesses from exporting at all or exporting as much as they could.

“The whole trade community needs to work together to combat and reduce these challenges.”