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Santander

Trade Barometer

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Autumn 2018

A snapshot of business sentiment

One year after Santander began publishing the Trade Barometer, providing a quarterly snapshot of business sentiment and attitudes towards growing internationally, the latest edition of the research continues to provide key insights into how businesses see the future.

Most businesses are confident about growth

Our autumn 2018 update shows more than two-thirds of businesses (68%) are confident they will grow over the next three years. UK business optimism is holding up well over the past 12 months despite significant headwinds - such as geo-political tensions and the uncertainty around Brexit.

A clear link between international ambition and confidence

Businesses that plan to begin trading internationally in the next 12 months are especially confident, with 75% expecting to grow. More businesses intend to invest in international expansion, with 69% planning to expand their international activities during the next 12 months, a higher percentage than in any previous edition of the Trade Barometer.

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.

While the Summer 2018 Trade Barometer recorded spikes in many of the factors monitored in the Quarterly Tracker, including both drivers and costs, in most cases these have now fallen back to levels seen in previous editions.

In particular, inflationary pressures appear to have eased, with a reduction in the number of businesses citing increasing export prices, shipping costs and supplier prices over the past quarter. As a result, the number of businesses reporting increases in their own prices has fallen.

Read more on the Quarterly Tracker in the full report

Sources of negative impact

Businesses are now most likely to worry that Brexit will have a negative impact on their activity in the next 12 months, with 43% fearing they could be adversely affected as a result.

A similar proportion (42%) are concerned about the potential impact of an economic slowdown in the UK and 38% worry fluctuations in the value of the pound will negatively affect their business.

Read more about sources of negative impact in the full report

Changes made as a consequence of Brexit

The autumn 2018 Trade Barometer shows that the number of businesses making plans for Brexit continues to inch up but still remain relatively low.

Almost two-thirds (65%) of businesses now say they have made plans for Brexit, up from 51% three months ago and from 44% at the end of last year.

However, 35% of businesses still report they have not made plans for Brexit. Given the uncertain outcome of the Brexit negotiations, some businesses may have decided a wait and-see approach is the right way to proceed, even if time is now increasingly tight given that the UK is due to leave the EU in March 2019.

Read more about Brexit planning in the full report

Brexit concerns for trade and supply chains

The potential impact of Brexit worries both SMEs and larger businesses but the former are less concerned.

Some 24% of SMEs are worried about lower trade with the EU following Brexit against 31% of larger businesses. Among smaller companies, the issue of tariffs on EU sales (29%) is the most commonly cited concern.

Elsewhere, the costs that could potentially be associated with customs procedures post-Brexit are a concern for 29% of SMEs, closely followed by administrative costs (27%) and the cost of complying with other regulations (26%).

Read more about international trade plans and concerns in the full report

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
84%39%
 
EU Outside Eurozone
58%21%
 
Europe Non EU
53%19%
 
Eurasia
31%10%
 
North America
56%30%
 
South America
28%9%
 
Asia Pacific
47%31%
 
MENA (Middle East North Africa)
24%7%
 
SSA (Sub-Saharan Africa)
15%5%

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