Bleak trade picture for SME exporters

A survey from the British Chambers of Commerce is painting a depressing picture for small businesses trading overseas.

The BCC’s Trade Confidence Outlook for Q2 2024 shows most SME exporters’ overseas sales are flatlining, with only a quarter (27 per cent) witnessing an increase in export sales.

William Bain, Head of Trade Policy at the BCC, said: “Our research shows the Government will have its work cut out in trying to revitalise UK exports, as they continue to underperform.

“But it has already taken some steps to help firms turn a corner. This includes its trade strategy announcement, restarting trade negotiations in vital markets, joining the World Trade Organisation’s e-commerce agreement and committing to improving our relationship with the EU.”

Conducted by the BCC’s Insights Unit, the survey receives responses from around 2,000 UK SME exporters.

It shows the percentage of SME exporters reporting increased exports has been broadly static since the pandemic, with a slight three percentage point uptick in Q2. Overall, 52 per cent reported no change, and 21 per cent reported a decrease. SMEs are now more likely to report decreased exports compared to before the pandemic and Brexit.

In Q2 2018, only 14 per cent of SME exporters reported a decrease in overseas sales.

By contrast, domestic demand for SME exporters remains consistently more buoyant, with 37 per cent reporting an increase in domestic sales in Q2 2024.

The one bright spot is SME manufacturers, with 31 per cent reporting an increase in exports. This compares to SME services exporters supplying end customers (B2C), where 25 per cent saw an increase, while 24 per cent of firms supplying services to other businesses (B2B) saw a rise.

The picture for advance orders was less rosy, as all three sectors show slippage, with 28 per cent of SME manufacturers reporting an increase, 23 per cent of B2C firms and just 20 per cent of B2B businesses.

“Legislation announced in the King’s Speech also has the potential to ease the problems of regulatory divergence for regulated products sold into the EU.

“Business wants to work with Government to put in place a framework that makes use of all the UK’s advantages and makes it easier to access incentives for exports.

“A focus on critical minerals supply chains and taking full advantage of the opportunities offered by digital trade would also have real value for our firms.”

The one bright spot is SME manufacturers, with 31 per cent reporting an increase in exports. This compares to SME services exporters supplying end customers (B2C), where 25 per cent saw an increase, while 24 per cent of firms supplying services to other businesses (B2B) saw a rise.