The British Chambers of Commerce, in partnership with DHL, today (Friday) publishes its latest Quarterly International Trade Outlook, based on survey and documentation data from UK exporters. The Outlook indicates that many exporters are performing well but economic and political factors are weighing on them.
The survey, of over 2,600 exporters, found that confidence in future operations remains strong, but external economic and political factors are having an impact. The results show 60% of exporting manufacturers were more concerned about exchange rates in the second quarter of the year than in the previous three months. There was also increased concern among 43% of service exporters,
highlighting the broad impact of the weakness of the pound.
The findings indicate that price pressures eased slightly on exporters during the second quarter of the year. However, those manufacturers under pressure to raise prices report the cost of raw materials as the leading factor (81%). Service firms believe the cost of raw materials (39%) and other overheads (51%) are the leading sources of cost pressure.
The escalating labour shortage in the UK is also having a serious impact on exporters, with a staggering 69% of recruiting manufacturers struggling to find staff.
Elsewhere, the BCC/DHL Trade Confidence Index, which measures the volume of trade documents issued by accredited Chambers of Commerce for goods shipments, decreased slightly on the quarter (-1.34%), but still stands higher than at the same quarter in the previous year.
The Outlook indicates that many UK exporters are maintaining their competitiveness in foreign markets with healthy sales and order books, but the weakness of the pound is increasing the cost of raw materials imported from abroad. With growing tension around the nature of the future UK-EU trading relationship and escalating trade disputes with key partners such as the US, the government must do all it can to maintain confidence and take unilateral action to improve the domestic business environment wherever possible.
Key findings from the report:
- 39% of exporting manufacturers saw an increase in export orders over the last three months, 30% of exporting service firms report an increase
- 60% of manufacturing exporters are more concerned about exchange rates than three months ago (up from 56% in the previous quarter)
- 26% of manufacturing exporters and 25% of service firm exporters are more concerned about inflation than three months ago
- 35% of exporting manufacturers and 32% of exporting service firms expect the price of their goods/services to increase
- For those manufacturing exporters under pressure to increase prices, 81% report the cost of raw materials as the leading source of pressure
- 77% of exporting manufacturers and 67% of services firms attempted to recruit in the last three months, however, of those, 69% and 60% respectively reported difficulties finding the right staff
- The BCC/DHL Trade Confidence Index, a measure of the volume of trade documentation issued nationally, fell by 1.34% on the quarter. The Index now stands at 125.26 – the fifth highest level since records began in 2004.