GEORGE Osborne must use next month’s spending review to boost “front line” support for exporters, business chiefs have warned, after a major survey laid bare the pitfalls facing firms that trade overseas.
British Chambers of Commerce (BCC) director-general John Longsworth called on the Chancellor to help companies establish connections with agents, distributors and potential customers abroad.
Data from nearly 5,000 businesses – one of the most comprehensive studies of its kind – reveal that 39 per cent of firms are now exporting, up from 32 per cent last year.
Africa and the Middle East are grabbing attention away from Asia and South America, with markets including India and the United Arab Emirates featuring at the top of potential exporters’ hit list.
But businesses want more help when it comes to gathering knowledge about overseas markets and getting trade credit insurance to help battle cash-flow and payment risks.
Longsworth said: “Small, medium and mid-sized companies need support on the front line. Companies want to work with people who understand business, with the local knowledge on the ground that can deliver practical contacts, potential partners, real customers and supply chains.
“To meet the scale of the UK’s economic challenge, funding for the development of SME exporters and in-market support should be increased further as part of the government’s upcoming spending review.”
He added: “The UK government has a responsibility to help bridge the gap between market opportunity and risk.
“Businesses should be better exposed to the opportunities of global trade through greater support from the government for promotional activity and trade show attendance.
“The time to act on these opportunities is now, as only then will the UK stand a chance at competing with the rest of the world, and driving our economic recovery for years to come.”
Official figures this month showed that the UK’s trade deficit with the rest of the world narrowed in March thanks to a 3.5 per cent rise in the value of exports.
The gap fell slightly to £3.1 billion from £3.4bn, despite the value of imports rising by 2.6 per cent and a widening of the deficit with the European Union in the quarter, mainly on trade with Germany and the Netherlands.
Manufacturers have been pinning their hopes for export growth on a continuation in the fall of the value of sterling, which makes their goods cheaper for foreigners to buy.
Ahead of industrial trends figures due on Wednesday from the CBI, Howard Archer – chief UK and European economist at IHS Global Insight – warned that exporters still face headwinds.
“Subdued and stuttering global economic growth, and Eurozone economic weakness in particular, is a constraint to foreign demand for UK manufactured goods,” Archer said.
The BCC’s survey comes weeks after the CBI published its own The Only Way Is Exports report, which highlighted 11 steps the UK government could take to increase support for exporters.
Top of the list was rolling Westminster’s export finance schemes into Vince Cable’s new business bank.
John Cridland, the CBI’s director-general, warned the UK was too dependent on imports. “Ships are arriving in UK ports bringing in more goods than they take back,” Cridland said.