Despite relatively weak UK GDP growth in Q2 this year, a DHL/British Chambers of Commerce index shows export growth is still rising.
German logistics giant DHL and the British Chambers of Commerce (BCC) have released an index showing the health of the British export market.
Data for Q2 2011 shows a 3.6% increase on the same quarter last year; suggesting that companies’ export sales are still growing. Yet continued uncertainty around the resolution of the Eurozone debt crisis, and the fragility of the UK’s economic recovery means British exporters are less likely to employ extra people.
Exporters’ intentions to invest in plant and machinery have recovered slightly since the recession, but they still remain weak by long-term standards. Exporting businesses exhibit less confidence to invest now than they did in the first three months of 2008, immediately prior to the recession.
Similarly, exporting firms’ plans to take on more staff in the next quarter are anemic, highlighting the fragility of the recovery. In manufacturing the balance is +4% and in services +13%.
The index also reveals regional differences, with the number of export documents for goods issued in London, South East and North West running far ahead of many other regions, including the North East of England, Northern Ireland and Wales.
There is a disconnect between the strong performance of exporting firms and their lack of confidence when it comes to investing and creating jobs,” said Director General of the BCC, David Frost. “Cashflow is still a real problem for exporters, particularly smaller firms, and the results show that there are regions of the UK that lag behind when it comes to exporting outside the EU,” he added.
Phil Couchman, CEO of DHL Express UK and Ireland said: “The UK’s economic recovery relies on exporting and investment, specifically from small to medium sized businesses. As the lifeblood of the British economy, the reluctance from exporters to invest is a concern.”