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Trade Barometer

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Winter 2018

A snapshot of business sentiment

We regularly analyse the responses of businesses with the size and ambition to engage in international trade, to provide unique insight into current business attitudes. The Trade Barometer can help shape how advisers, industry groups and policymakers support the business community in the months and years ahead.

Brexit uncertainties causing concern

Our winter update reveals that growing numbers of businesses are unnerved by the ongoing uncertainties of Brexit and geopolitics, suggesting they would benefit greatly from more advice and practical support.

Businesses feeling less optimistic of future prospects

While confidence levels remain relatively high at 61%, the latest research shows a dip in optimism about prospects, growing nervousness about investment and more caution over international expansion.

However, businesses with plans to expand their international activities show greater levels of optimism about their growth prospects for the next three years than those with no expansion plans.

Business growth confidence in the next three years

How do you compare?

Let us know how confident you feel about your business growing over the next three years.

1 = very cautious, 5 = very confident

1Very cautious
2Cautious
3Neutral
4Confident
5Very confident

Key findings

  • Quarterly Tracker
  • Future negative environments
  • Brexit plans implemented
  • Barriers to trade post Brexit
Quarterly Tracker

Our Quarterly Tracker records businesses’ views about their key business drivers, prices and costs.

In the winter update, businesses report a decline in their one, three and six month order books, with both domestic and international sales affected.

Meanwhile the number of respondents telling us about increases in import prices and exchange rate costs have risen to levels seen earlier in 2018 after brief dips.

Sources of negative impact

Businesses are still most likely to worry that Brexit will have a negative impact on their activity in the next 12 months, with 44% fearing they could be adversely affected as a result.

A similar proportion (44%) are concerned about the potential impact of an economic slowdown in the UK, but there’s been a slight drop in those who see Sterling fluctuations (36%) or increased protectionism (19%) having an impact.

 

Changes made as a consequence of Brexit

While heightened Brexit concerns might have been expected to prompt businesses to do more contingency planning, the political discussions around the possible Brexit outcomes may have made this more difficult; only 50% report they have contingencies in place.

The Winter 2018 Trade Barometer shows that business planning for Brexit has fallen back slightly compared to previous results, and businesses and levels of changes businesses have already implemented as a consequence of Brexit have also fallen across different metrics. Opening non-sterling bank accounts remains the most common course of action.

 

Brexit concerns for trade and supply chains

The potential impact of Brexit worries both domestic and international businesses, but the former are less concerned.

Just 16% of domestic businesses are worried about lower trade with the EU following Brexit, against 35% for international businesses.

Amongst domestic companies, tariffs on goods imported as a part of their supply chain (18%) is the most commonly cited concern.

Additionally, we find that those businesses that are about to start trading internationally over the next 12 months are the ones most concerned about tariffs on EU sales (36%), compared to domestic or international businesses.

 

Growth in international markets

While businesses’ international trade is still heavily focused on Europe – both inside and outside of the European Union – many now expect future growth to come from further afield. Explore our map to find out where trade is headed.

NameCurrent activityFuture growth
 
Eurozone
80%32%
 
EU Outside Eurozone
58%20%
 
Europe Non EU
57%19%
 
Eurasia
30%11%
 
North America
62%32%
 
South America
30%11%
 
Asia Pacific
47%27%
 
MENA (Middle East North Africa)
20%8%
 
SSA (Sub-Saharan Africa)
18%8%

Our results show there is a clear link between international ambition and business confidence.

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