Trade Barometer

Santander Trade Barometer

UK companies report growing business confidence and step up Brexit preparations

Almost three-quarters of businesses say they are confident they will grow over the next three years

Our summer Trade Barometer update has revealed that businesses are taking a bullish view of their growth prospects, with 73% saying they are confident they will grow over the next three years – up from 65% in the previous quarter.

The increase in optimism reflects their ability to find new clients (51%) as well as businesses’ perception that economic conditions are improving in the UK (40%).

Businesses that plan to enter overseas markets are the most positive (83%) about their outlook.

What is the Santander Trade Barometer?

The Trade Barometer is Santander’s research report that provides unique insight into business attitudes towards growth, risk and business performance. 

We interview more than 1,000 businesses with the size, scale or ambition to trade internationally or expand beyond the domestic market. 

In addition to sharing our insights on business attitudes, the Trade Barometer can help shape how advisors, industry bodies and policy makers support the business community in the months and years to come.

Businesses step up Brexit preparations

The steps businesses are taking to mitigate the impact of Brexit have changed significantly over the past three months. Almost a third (32%) say they intend to set up non-sterling bank accounts (24% in the previous quarter) while 28% report plans to freeze or even reduce headcount (21% previously).

Pressure to reduce costs appears to be mounting with 24% of businesses saying they are aiming to bring down overheads, 19% intending to freeze salaries and 19% planning a pause on business investment.

Trade Barometer Boat

External pressures continue to ease

Although Brexit is seen as the biggest risk to growth in the current market environment with 36% of businesses citing this as a significant issue, this is down from 39% in the previous quarter. It provides further evidence that companies are coming to terms with the UK’s departure from the EU.

When it comes to future risks, UK economic slowdown (43%) and Brexit (43%) continue to be the main sources of negative impact on business over the next 12 months. However, there is less concern about a domestic slowdown compared to the previous quarter (down by 4%), and worries over Brexit have picked up slightly (up by 2%).

Currency fluctuations still appear as a concern (35%), although level of concern has decreased compared to the previous quarter (40%). Sluggish growth in key markets – whether domestically or overseas – is also seen as a major risk by 35% of respondents.

Meanwhile, among businesses which plan to start trading internationally in the next 12 months, concern about external factors such as geopolitical risks and interest rate changes appear to be highest: 77% of such firms say these threats could restrict their ability to hire new staff, while 76% say they could hinder expansion into foreign markets.

Recognising international identity

The Trade Barometer suggests many UK businesses do not fully recognise their international exposure. 

Among those firms who identify themselves as purely domestic in the survey, 24% say they sell goods or services outside of the UK, 31% purchase goods or services from overseas suppliers and 18% have customers based outside the UK.

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