Companies with turnovers exceeding £1 million are marking the strongest growth and more than 50 per cent of participating businesses say exports make up half of their total turnover. The biggest barriers to growth are lack of access to finance coupled with a shortage of skilled staff.
Lack of support from banks is forcing 66 per cent of the 1,800 participating companies to dip into their own finances to drive growth. Small and medium sized enterprises with turnovers below £5 million and expanding order books are the hardest hit when seeking support from banks and government departments.
Regarded as the most accurate and comprehensive barometer of the health of Britain’s export industry, the survey is produced by The Institute of Export (IOE) and Trade and Export Finance Limited and sponsored by the UK’s leading independent invoice financier, Bibby Financial Services.
Fifty per cent of respondents hail from manufacturing and engineering companies – with over 65 per cent actively trading internationally. The top seven markets for growth are Europe, China, India, North America, Middle East followed by Brazil and Russia. More than 85% of respondents sell directly to buyers and over half of them have an export strategy in place.
The report also highlights that in spite of the UK Government placing a strong emphasis on accelerating growth through exporting; many businesses dealing in international trade are unaware of the support and advice available from government agencies.
With less than 10 per cent of companies with a £1 million plus turnover receiving government support, survey author Mark Runiewicz, CEO of Trade and Export Finance Limited (TAEFL) which specialises in providing advice on all aspects of banking and finance, is calling for a more focused and ‘joined up’ strategy.
He said: “We need to assist exporters to access the finance available to fund their order books and remove the blocks placed by banks to fund profitable businesses. We have anecdotal evidence of businesses that could increase their business and meet the demand for products if they had the right level of funding.”
The report also highlights that almost 30 per cent of participating companies fail to provide employee training in international trade.
Said Lesley Batchelor, director general of the Institute of Export – the only organisation of its kinds providing training and education in international trade: “We urge companies to consider their professionalism and competitiveness in the global market. Fierce competition on an international scale requires businesses to gain a strong insight into the world of international trade in order to hit the ground running.”
Simon Davies, global finance director at Bibby Financial Services, the UK’s leading independent invoice finance provider, added: “We know from our 4,500 strong UK client base that with the right advice and funding support, small and medium-sized businesses can flourish when trading in international markets.
“However, the results of this study show too many businesses are being forced to go it alone, financing their own export activities and finding that the banks and government departments lack the expertise and insight to offer valuable support.
“Invoice financiers which specialise in delivering funding facilities for businesses importing and exporting provide both the tools and the knowledge to operate successfully on an international level. In working to address the shortfall in funding to UK exporters, we hope the economy will see even greater gains from companies targeting foreign markets.”
The survey builds up a clear evaluation of the UK’s export market which is then used by Government, the Bank of England and other UK policymakers to shape and influence future government policy. It provides an invaluable benchmark against which to evaluate the effectiveness of initiatives to kick-start international trade.