international
trade
Falling sales but non-EU markets offer hope for exporters The British Chambers of Commerce’s Trade Confidence Outlook for Q1 has revealed the stark issues facing UK exporters in the first months of this year. The survey of more than 2,900 UK exporters showed that the percentage of firms reporting lower export sales had increased to 41%, up from 38% in the previous quarter. The percentage of businesses reporting increased export sales fell to 20%, down from 22% in Q4 2020. The historical percentage balance data for this indicator shows that the proportion of firms reporting increased export sales remains at a historically low level and has, in fact, worsened compared to the previous quarter. The balance of manufacturers reporting increased overseas sales was down to -9% from -8%, while the balance of services firms for this indicator dropped to -26% from -22%. For advance orders from overseas customers, the picture remained broadly the same. More than eight in ten (81%) hotels and catering firms reporting
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decreased advance exports sales, alongside 59% of retail and wholesale businesses. Worryingly, this suggests that exporters are not seeing signs of the situation improving in the short term. Respondents cited Brexit and the impact of COVID-19 as the biggest causes of problems in trade. Firms told of issues such as shipping delays, increased cost of transporting goods and extensive paperwork requirements, with many seeing the problems they were facing as structural in nature rather than short-term issues likely to alleviate as companies adjusted to the changes in the UK-EU trading relationship. Alan Rides, MD of Hounslow Chamber of Commerce, says: “First came the pandemic in 2020 which meant that the UK imported huge volumes of PPE from Asia. With little cabotage, these containers piled up around the ports, causing congestion. Then in 2021 came the gridlock after the Suez blockage resulting in a tidal wave of freight arriving in the UK to compound the container port congestion problem. This has resulted in our port of Heathrow handling over 40% of UK’s exports.
“With export documentation and inspection issues relating to goods travelling to and from the EU, freight to the EU was down to less than half (49%) of UK exports in Q1 2021.”
