The Spring 2021 edition of our Trade Barometer research shows that British exporters are increasingly looking further afield for new customers. This is due to Brexit uncertainties undermining trade with the European Union (EU) and post pandemic global pressures beginning to ease.
Against this backdrop, many businesses are now considering truly global opportunities. Almost a third (32%) of respondents now regard North America as the region that is most likely to generate the most exciting growth prospects for their businesses, overtaking the EU (cited by 31%) which topped the ranking in our Autumn 2020 research. Almost a quarter (23%) pick out Oceania as a key region for growth, while 21% are looking to Greater China and 20% point to the Middle East.
These global horizons are also evident at a country-specific level. The US is the market of choice, with 31% of Trade Barometer respondents expecting it to deliver growth opportunities in the coming year. However, China (17%), and Australia (17%) are both ahead of the top-ranking markets closer to home, Germany (16%) and France (12%).
Mixed views of the UK’s post-Brexit trade deal with the EU are part of the story, with 23% of businesses in the Trade Barometer now worried that increased costs and bureaucracy are making it more difficult to trade with existing European markets.
However, there are also positive reasons to look to new opportunities beyond Europe. The number of businesses worried by the possibility of sluggish global economic growth has fallen sharply since the 2020 Trade Barometer. And just 15% of businesses say they are concerned by geopolitical risks, down from 21% in the autumn. This may reflect the election of President Joe Biden in the US and the hope that his administration’s approach to foreign affairs and protectionism will be more moderate.
Overcoming challenges to export growth
While the growing willingness of British businesses to embrace global opportunities is to be welcomed, many will need support if they are to turn ambition into reality. It is clear that significant obstacles stand in the way of expansion overseas for many would-be exporters.
The biggest operational challenge of all for international businesses is the bureaucracy involved in trading with overseas markets, with 44% of respondents pointing to this issue. The pandemic-related challenges remain pressing (40%), while 27% said that issues around the physical distance of trading in another market, including transportation costs and logistics, remain a challenge. This is likely to be particularly difficult for destinations beyond Europe.
More broadly, many international businesses worry about market access, which territories they should target and how to break into them. Part of the challenge is businesses’ nervousness about dealing with new customers and finding local trading partners.
However, for those seeking to support these international businesses overcome these challenges, from government bodies to banking partners, it will be crucial to recognise that obstacles vary from one company to another. And what may be difficult in one market may be much less problematic elsewhere.
In China, for example, 38% of businesses say finding trustworthy partners is an obstacle standing in the way of their growth in the market. In India, by contrast, bureaucracy is the biggest concern, also cited by 38%. In the US, there is a different problem, with 21% concerned about the challenging competitive environment.
In such a landscape, identifying tailored solutions to businesses’ most pressing concerns will be the key to ensuring they’re able to unlock their export potential. In a post-Brexit marketplace, as the recovery from the pandemic takes hold, many businesses are excited by the potential of exporting more globally, helping them fulfil that potential must now be a priority.
How we can help
With our expertise in sectors and countries, as well as support from the ecosystem, which includes sector/industry partners and global banking partners, we’re able to help businesses with both financial and non-financial solutions. Navigating new markets, regulatory requirements and overcoming barriers to trade are just some of the ways we can support UK businesses.
Our sector-focused virtual forums such as the Global Food Forum (Feb 2021) and the Manufacturing Industry Week taking place 20 to 22 April offer in-depth insights, updates and guidance from the industry, sector and international trade experts. These forums are helpful to businesses who are looking to start trading or expand their trade internationally.
Here’s what one of our customers has to say:
‘Alongside its range of financial support, Santander offers us both international connectivity and valuable food and drink expertise.
Chris Smylie, Managing Director of Smylies Ltd. Read more in our article about Smylies
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For more information, please read the full Trade Barometer report.