Business chiefs have called for urgent support for companies looking to enter new export markets in an effort to bolster the economic recovery.
The plea to Westminster came as figures yesterday showed a narrowing in Britain’s trade deficit with the rest of the world thanks to a rise in the value of exports.
The CBI described the upturn as “encouraging” but cautioned against reading too much into one month’s data. It said the underlying trend for exports growth was near to flat.
Jim Bligh, the lobby group’s head of exports policy, said: “With total exports to the fast-growing Bric [Brazil, Russia, India and China] economies still only making up 7 per cent of the UK’s total, the same as the amount we export to France, we still have a long way to go before exports are really driving economic recovery.
“The [UK] government must urgently prioritise support for growing companies with the potential to enter new markets, by making export finance schemes easier to access and introducing an incentivising tax break for new market exploration.”
David Kern, chief economist at the British Chambers of Commerce, added: “More action is needed to utilise the untapped potential of many British exporters, particularly in the services sector, so that businesses can drive a sustainable recovery.”
According to the Office for National Statistics (ONS), the value of exports increased by 3.5 per cent in March, compared with the previous month. That helped the deficit on trade in goods and services to narrow to £3.1 billion from £3.4bn a month earlier.
The improvement came despite a 2.6 per cent increase in the value of imports and a widening of the deficit with the European Union in the quarter, mainly on trade with Germany and the Netherlands.
Markit economist Chris Williamson said the trade data added to signs that the manufacturing sector was finding its feet again, helped by the pound remaining 25 per cent below its pre-crisis peak.
He added: “Official data and surveys paint an encouraging picture of the UK gaining market share in overseas markets, suggesting the economy is showing signs of rebalancing away from domestic consumption to export-led growth.”
Howard Archer, chief UK and European economist at forecasting group IHS Global Insight, said there were “some modestly encouraging features” within the trade report.
“The hope is that the overall marked weakening of the pound earlier in 2013 will increasingly feed through to boost exports and the beneficial impact of this is reinforced by global growth gradually improving later on in 2013 and beyond.”
ONS data showed construction output rose 12.1 per cent month-on-month in March.