Chamber highlights export concerns after minimal growth in Q2

Cumbria Chamber of Commerce is urging the government to listen to exporters, business experts and key organisations after the latest national figures highlight that trade is continuing to struggle.

Exporters in the region, such as Oxley Group and Kingfisher Seafoods Ltd, of Barrow, have previously highlighted the problems they’ve had since the start of the year with the current UK-EU trading arrangements.

The Chamber has renewed its call for the government to work to smooth out the added red tape and points of difference after the latest British Chambers of Commerce’s Trade Confidence Outlook for Q2 figures show that the number of businesses reporting a decrease in export sales remains historically high.

What the statistics mean:

  • Proportion of UK exporters reporting increased export sales (27 per cent) rises by 7 per cent from Q1. 45 per cent reported no change in their export sales.
  • The percentage of businesses reporting decreased export sales fell to 28 per cent, down from 41 per cent, however this remains a historically high proportion.
  • The balance of manufacturers reporting increased overseas sales was up to +8 per cent from -9 per cent, while the balance of services firms reporting increases rose to -7 per cent from -26 per cent.
  • Overall, 35 per cent of manufacturing exporters surveyed reported increased overseas sales in Q2, with 27 per cent reporting a decrease and 39 per cent confirmed no change.

Suzanne Caldwell, Managing Director of Cumbria Chamber of Commerce, said: “We’re more than half a year into the new trading relationship and more than a quarter of goods exporting firms are experiencing continued lower sales to EU customers. This is a historically high number and a real concern.

“The UK’s exporters are among the best problem solvers and innovators in our economy, and yet this latest data demonstrates that they are still struggling mightily to resolve the issues that they currently face.

“It re-affirms what we’ve been highlighting, and what we’ve been seeing with our member businesses across Cumbria.

“Some businesses, such as Oxley Group, have had difficulties which the majority of exporters have experienced. Others such as Kingfisher Seafoods Ltd have had a very particular problem whereby the government have completely overlooked the intricacies of their industry in the current arrangements. What they all have in common is that they’ve been compromised by the agreements put in place in the Brexit deal.”

The survey of more than 2,800 UK exporters also revealed that consumer-facing exporters are more likely to report decreased export sales.

This latest data demonstrates that businesses are still struggling and re-affirms what we’ve been highlighting

A breakdown of services between business-to-business (B2B) and business-to-consumer (B2C) exporters reveals that a considerably larger proportion of B2C exporters are seeing a fall in overseas sales, at 38 per cent in comparison to 21 cent of B2B.

The proportion reporting increased sales though was similar between B2B and B2C, 23 per cent and 22 per cent respectively. For B2B this represents an 11-point fall from 34 per cent reporting increased sales in Q1.

55 per cent of B2B firms reported sales staying constant in comparison to 40 per cent of B2C businesses. It should be noted that these numbers come on the back of historically high proportions of both B2B and B2C firms reporting decreased sales in the previous quarter, 31 per cent and 51 cent respectively.

Across a number of metrics, including domestic sales, confidence and expectation of workforce growth exporters were more likely than non-exporters to report rises.

This ties with historical data showing exporters as more likely to display confidence as they push into new markets or develop new products. Given that the recovery in overseas sales continues to lag domestic sales by a significant margin, it appears that, despite being dynamic businesses, exporters are still struggling to grow sales in the face of the issues currently affecting trade.

Respondents cited issues arising from Brexit as the main cause of difficulties with export sales in the quarter. Many pointed to ongoing issues with the TCA (EU–UK Trade and Cooperation Agreement), increased red tape or costs and losing EU based clients or customers to the perception that trade was now simply too difficult or complex.

Suzanne added: “With respondents, including Cumbrian businesses, reporting Brexit as a key problem, we urge the government and the EU to address these pressures on exporters as the UK and EU economies open up – the red tape around import VAT and the new portals, paperwork and checks for agri-food exports, consistency of approach on customs rules and checks, looming deadlines on CE-marked goods, and the restrictions on labour mobility and service provision.

“It’s clear the TCA needs to apply ways which cut the current red tape costs and burdens on EU exports. The government needs to solve these issues so that exports can become a driving force in our recovery from the pandemic as we expect them to be.”

**Cumbria Chamber’s toolkit is on the website at: https://www.cumbriachamber.co.uk/news/28573-restart-rebuild-and-renew

© Cumbria Chamber of Commerce