Mixed picture for region’s exporters

More than half (56%) of exporters in the region expect their ability to compete in international markets to improve in the next 12 months, five points higher than six months ago.

According to the latest Business in Britain report from Lloyds Bank, a similar number (52%) said they had seen their overseas sales grow over the last six months, compared with just 23% who said they had fallen.

Half of Yorkshire exporters said sales to Europe had grown during the same period. Just under a third said they had grown trade with China and 29% had increased sales to the USA.

And despite facing continued uncertainty, almost half (44%) expect their overseas sales to increase over the next six months, compared with a quarter that expect international sales to fall.

The good news comes as the latest data from ONS revealed the value of British exports hit a record £621bn in the 12 months to June 2018, with service exports rising 2.2% to an all-time high of £278bn and exports of goods climbing 6.3% to £343bn.

However, more than one in six Yorkshire exporters also said they still hadn’t reviewed their trading plans more than two years after the Brexit referendum.

Simon Quinn, regional director at Lloyds Bank global transaction banking, said: “We have to recognise that the Brexit negotiations can affect how businesses are feeling and this can change.

“But it’s heartening to see that a large number of Yorkshire exporters demonstrate confidence towards their trade prospects, especially in light of continued domestic and international uncertainty.

“However, while the ongoing negotiations around the UK’s departure from the EU and its potential impact are an important point on most businesses’ agendas, it’s maybe a cause for concern that 17% of Yorkshire exporters may not have reviewed their own strategy since the referendum two years ago.

“It may be difficult to plan whilst there is uncertainty over the nature of the UK’s departure, but there is little doubt that businesses will face some degree of change in the months and years ahead. All exporters should be taking proactive measures in the interim to prepare for that.”

The Business in Britain report, now in its 26th year, gathers the views of more than 1,500 UK companies, predominantly small to medium-sized businesses, on a range of issues facing them.

Top UK export markets

More than a fifth (21%) of Yorkshire exporters expect the biggest opportunities for international trade to be with China, up four points from six months ago.

Meanwhile, 17% expect the biggest opportunities to come from the US, down from 30% at the end of 2017.

One in 10 cited Germany, up four points at the end of last year.

Challenges

Yorkshire and the Humber firms state the biggest barrier to exporting is exchange rate uncertainty, which was cited by 47% compared with 44% six months ago.

Difficulty finding potential customers was cited by 41%t, compared with 32% six months ago, while tariffs and quotas was mentioned by 31%, up from 29%.

Although the majority of Yorkshire exporters hold a positive outlook, 17% expect their ability to compete in international markets to deteriorate over the next year.

Almost a quarter said their overseas sales had dropped in the last six months, while slightly more (25%) said they expected their exports to drop over the next half year.