The Spring 2021 edition of the Santander Trade Barometer research shows that while the past year has been dominated by the COVID-19 pandemic and ongoing uncertainty over Brexit, businesses which are international in their outlook have stood a better chance of success.
The research reveals that while the past year has had a generally detrimental effect on business performance across the board, companies which trade internationally are more likely to say their sales have increased (30%) than businesses which are focused solely on the UK market (24%).
Meanwhile, the former group are considerably more optimistic about their prospects for growth; 67% of international businesses expect to expand in the next three years against 60% of domestic companies.
The factors cited by businesses as the key drivers of growth between now and 2024 also show how vital a role international markets are likely to play, with over a quarter of businesses (26%) looking to existing international markets as a source of growth and 17% looking to grow in new international markets.
Looking to the future
Activity in overseas markets as well as in the UK provides businesses with an invaluable degree of diversification. This can not only help protect them in times of downturn, as the above statistics indicate, it can also give them access to a wider range of potential growth opportunities as the global economy recovers.
But the challenges that have surrounded Brexit have, perhaps unsurprisingly, changed businesses’ views around expected sources of future international growth. Since the Autumn 2020 Trade Barometer, North America (32%) has overtaken the European Union (31%) as the region where companies expect the most growth in the next three years. In terms of individual countries, the United States (31%), China (17%) and Australia (also 17%) are thought to offer greater potential than even the most dynamic Eurozone market, Germany (16%).
Meanwhile, there are encouraging signs that UK businesses, which don’t currently sell overseas, are increasingly likely to consider international trade as part of their growth strategy.
The latest research found that 20% of domestic-only businesses are considering international expansion in the next two years, up from 9% in 2018 and 15% as recently as 12 months ago.
Overcoming barriers to international success
This willingness to embrace international trade – and the potential route it offers out of the current economic downturn – means it is more important than ever for policymakers and banking partners to support businesses as they attempt to broaden their horizons.
The research highlights exactly where this support would be most effectively targeted. Among businesses which already trade globally, for example, 44% cite bureaucracy as the most frequently encountered operational challenge, followed by issues related to the pandemic such as travel restrictions and supply-chain disruption (40%), and post-Brexit regulatory changes (39%).
For current domestic businesses, transport costs (36%), a lack of managerial time to address expansion (33%) and issues around language and cultural differences (32%) are perceived to be the most significant obstacles to overcome.
Businesses that can get the right levels of tailored support to help them address these issues will stand the greatest chance of success, helping themselves and the UK economy emerge successfully from the pandemic.
How we can help
We’re well positioned to support you across your trading journey. As you look to emerge from the difficulties of the last 12 months and get to grips with new regulatory challenges post-Brexit, we have a suite of financial and non-financial solutions to help you navigate your trade journeys.
With bureaucracy and regulatory challenges, we offer a business diagnostic solution that could enable you to identify the specific actions needed to meet the new regulatory and process requirements. We also offer training modules in helping to educate you on the processes post-Brexit.
Finally, we have access to a network that can introduce you to a customs agent to complete and process documentation, and the latest addition to our support offering is a Trade Compliance Helpdesk should they have any questions or concerns.
For more information, please contact us on: email@example.com