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One in four British exporters still haven’t reviewed their trading strategy following the UK’s decision to leave the EU, according to the latest Business in Britain report from Lloyds Bank.
This is an improvement of 23 percentage points on six months ago when compared to a similar survey carried out by Lloyds and YouGov of over 1,000 British exporters.
Of those exporters that have reviewed their trading strategy, more than half (53 per cent) have decided to focus more on UK opportunities, which is an increase of 23 percentage points when compared to the same YouGov survey, showing that an increasing number of UK firms are shunning international markets to focus on domestic opportunities.
Despite this, Britain’s exporters remain largely buoyant about their 2018 trade prospects following a positive 2017 exporting performance.
A net balance of 25 per cent said total exports have gone up over the previous six months with a similar number expecting total exports to increase over the coming six months.
Clive Higglesden, head of trade and supply chain product, Global Transaction Banking at Lloyds Bank, said: “The decision of a quarter of UK exporters still not to review their international trading strategy following the EU referendum is concerning. It is comforting to see this number decrease from what it was a year ago, but 25 per cent is still disconcertingly high.
“It is perhaps understandable that British firms are looking to limit their exposure to foreign markets and focus on what they know, as they believe this to be the less risky strategy. However, they need to be conscious that they will be more heavily impacted by UK business cycles and could be left heavily exposed to a downturn in the UK economy. Diversification into overseas markets can reduce exposure to these cycles and can in fact reduce a company’s overall risk.
“The survey does show that exporting will still play an important role in British firms’ plans and it’s encouraging to see exporters display such confidence towards their trade prospects.
“Judging from British firms’ export performances over the previous six months, this confidence is not misplaced and by using internal trade as a growth strategy for their business British firms can manage risk and look to grow in 2018.”
The Business in Britain report, now in its 26th year, gathers the views of over 1,500 UK companies, predominantly small to medium-sized businesses, and tracks a range of performance and confidence measures, weighing up the percentage of firms that are positive in outlook against those that are negative.