Tuesday, August 26, 2014

News: Mid-sized businesses reluctant to export despite renewed confidence

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UK mid-sized businesses are being too conservative in their export ambitions and are not considering key growth markets overseas, even though they are aware of the benefits, new research from Lloyds Bank shows.

Almost three out of five firms (58%), turning over between £25m and £750m, said that they do not currently export and less than one in ten (7%) are looking to do so within the next five years, indicating that over half of mid-sized businesses are still cautious in considering their long-term export strategy.

It follows from the announcement in January that mid-sized businesses in Yorkshire will be some of the first to be personally offered tailored trade advice and an intensive programme of support from UK Trade & Investment (UKTI) to help them start exporting or break into new markets.

A pilot study was set to be conducted in Yorkshire and the South East followed by a full national roll out.

According to the findings of the Llyods report, just under a fifth (17%) of firms stated that selling overseas is one of their top three business objectives for the next twelve months. This contrasts with two out of five firms (43%) who said that focusing on growing their UK market is their top priority and three out of five mid-sized firms (60%) who are focused on increasing turnover.

This lack of focus on exports is despite businesses being aware of the benefits. Around three-quarters (73%) said that the main advantages of overseas trade were expanding their customer base while just over three-quarters (77%) linked it to increasing sales and profit.

Tim Hinton, managing director for SME and Mid-markets Banking at Lloyds Bank, said: "Although business confidence has reached a record high, mid-sized firms often appear to be overlooking the benefits of exporting.

"Businesses are focusing their efforts on their UK operations first, looking to reduce their costs and increase productivity before embarking on global growth opportunities."

Last week, the British Chambers of Commerce (BCC) and DHL Express published new research which identified that members who exported were confident of boosting turnover. Measuring UK exporting activity and business confidence of more than 2,300 exporting firms, it showed that more than two thirds (70%) believe their turnover will improve in the next 12 months – up 10% on the same time last year.

Export Britain website

Images: British Chambers of Commerce

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