Exporters report decrease in sales during Q1 - British Chambers
Four in 10 UK exporters reported a decrease in sales during the first quarter of 2021, according to a new survey.
The British Chambers of Commerce 's Trade Confidence Outlook for Q1 reveals the stark issues facing in the first months of this year.
The survey of more than 2,900 UK exporters revealed that the percentage of firms reporting decreased export sales had increased to 41 per cent, up from 38 per cent in the previous quarter.
The percentage of businesses reporting increased export sales fell to 20 per cent, down from 22 per cent in Q4 2020. 40 per cent reported no change in their export sales.
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 per cent from -8 per cent, while the balance of services firms reporting increases dropped to -26 per cent from -22 per cent.
Further sectoral breakdown reveals that hotels and catering firms and retail and wholesale firms were the worst hit, with 81 per cent and 60 per cent of respondents respectively reporting a decrease in export sales this quarter.
Just 4 per cent of hotels and catering firms reported an increase in export sales, with only 14 per cent doing so in retail and wholesale.
Among production, manufacturing, and construction firms, 36 per cent reported decreased export sales, with 27 per cent reporting an increase and 37 per cent reporting no change.
For advance orders from overseas customers, the picture remains broadly the same with 81 per cent of hotels and catering firms reporting decreased advance exports sales, alongside 59 per cent 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.
Co-executive director of the British Chamber of Commerce,?Hannah Essex (pictured), said: “Given that export sales are at some of the lowest levels ever recorded in the history of our data, the fact that situation is continuing to deteriorate is concerning. These new figures show that UK exporters are currently facing a range of issues that go beyond just those that have been created by the pandemic.
“Whilst our Quarterly Economic Survey earlier this month demonstrated that domestic sales had continued to recover towards pre-pandemic levels, these findings show exports not only failing to recover but falling back.
“Many businesses are telling us that their ability to continue trading is at risk due to issues arising from the UK-EU TCA. In response, Government has taken a step in the right direction with the establishment of the £20 million SME Brexit Support Fund, although we believe the scale of ambition needs to be much greater.
“The message is loud and clear that the difficulties exporters are facing are not just 'teething problems '. They are structural issues that, if they continue to go unaddressed, could lead to long-term, potentially irreversible weakness in the UK export sector.
“We are calling on both the UK and EU to get back around the table and produce solutions that reduce trade barriers and give exporters a fighting chance.
“Exporters want desperately to play their part in the UK economic recovery from Covid-19, but they are currently being hampered by issues outside of their control. Government must take further steps to bolster the UK export sector and unleash its potential to help power economic growth in the aftermath of the current crisis. ”