UK SME exporters face stagnant growth amid economic uncertainty: BCC

13 May '24

2 min read

UK’s small and medium-sized enterprises (SMEs) have seen stagnation in export growth since the pandemic, with a slight decline observed since the end of 2023, according to the latest Trade Confidence Outlook from the British Chambers of Commerce’s (BCC) Insights Unit. The findings highlight that fewer SMEs are reporting increased exports compared to the period before the pandemic and Brexit.

Data from Q4 2018 shows that 28 per cent of SME exporters saw an increase in overseas sales, which was four points higher than in Q1 2024. Additionally, only 16 per cent reported a decrease in that quarter, a figure that has worsened by seven points in the first quarter of 2024.

In a contrasting trend, domestic demand for SME exporters remains relatively robust. In Q1 2024, 35 per cent of SMEs reported an increase in domestic sales, compared to just 24 per cent who experienced growth in overseas sales. This disparity underscores the ongoing challenges faced in international markets, which have been exacerbated by the uncertainties surrounding Brexit. Since the lead-up to Brexit, the proportion of businesses reporting decreased overseas sales has been notably higher and remains persistent, as per the BCC.

The impact is uneven across different sectors. SME manufacturers appear to be more affected, with 27 per cent reporting an increase in exports, 46 per cent experiencing no change, and another 27 per cent seeing a decrease. On the other hand, SME service providers to end consumers (B2C) have also faced difficulties, with 22 per cent reporting increased exports, 51 per cent seeing no change, and 27 per cent experiencing a decline.

However, firms in the business-to-business (B2B) service sector reported the most stable performance, with 22 per cent experiencing growth in exports, 59 per cent seeing no change, and only 18 per cent reporting a decrease.

“The outlook remains fragile for 2024, notwithstanding forecasts of stronger global trade growth, due to ongoing geo-political uncertainty and growing concerns about the resilience of supply chains. There is also the spectre of further trade barriers with the EU, as the UK’s regulatory divergence increases.?But the UK’s brand and competitiveness remain strong, so we must lean more heavily into the advantages we possess, said William Bain, head of trade policy at the BCC.

Fibre2Fashion News Desk (DP)

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