Despite ongoing political turbulence, Europe remains the UK’s preferred export partner ahead of North America,with 45% set to prioritise Europe over other regions
Just under half of UK businesses (49%) expect to increase trade activity over the next year, well below the 62% global average; while around a quarter (23%) expect it to decline – the highest percentage across all nations.
These findings mean that businesses in the UK are by far the least positive about the year ahead, with more than a third (34%) calling out increased political uncertainty as the biggest barrier to international trade.
As a result, many UK businesses are calling on the government to remove trade barriers (40%), provide more investment incentives and funding (20%), and provide more support in developing opportunities in international markets (22%).
That’s according to the latest global study – We Power the Nation – published by cloud business management solutions provider, Sage.
The data also suggests that political uncertainty is a greater issue for larger UK businesses, with 41% of this group forecasting political uncertainty as a barrier, compared with 36% and 26% for medium and small-sized businesses respectively.
This is particularly pertinent, as in the next 12 months almost half of UK businesses are set to prioritise trade with Europe (45%), followed by North America (26%), and Asia (21%).
Key global findings include:
- 11 out of 12 countries cite international political uncertainty as the biggest barrier to investment in trade, with the highest levels reported in Brazil and South Africa.
- Three-quarters of businesses say that their experience of 2018 has had a positive impact on forecasts for 2019 trade – falling to 1 in 2 in the UK.
- Europe is highlighted as a priority trading market for all 12 countries, with North America close behind featuring in the top three for all but one country.
- 1 in 2 businesses surveyed have exported goods over the past 12 months – with Spain leading at 76% and the UK trailing at just 24%.
- 1 in 5 businesses globally call out uncertainty around jurisdictional compliance as a barrier to invest in trading internationally.
The other barriers cited by 10% or more of UK businesses are uncertainty surrounding jurisdictional compliance (13%), lack of talent and human resource (13%), and variance in product standards across regions (10%).
UK businesses are more likely to emphasise the importance of national governments addressing and removing the current barriers to trade than international counterparts, with 40% of UK businesses supporting trade policy reforms.
This is matched only by Brazil (40%) and contrasts to only 21% of businesses in France also calling for the removal of trade barriers, increased investment incentives and funding along with access to better technology tools.
Sabby Gill, managing director UK & Ireland, Sage, commented: “Businesses of all sizes are fully aware of the growth opportunities that exporting can deliver.
“It is encouraging to see the UK making progress on a trade deal with the US, but this research suggests Europe still remains the priority export market for UK businesses.”