Research by the British Chambers of Commerce (BCC) and Bibby Financial Services finds that Brexit uncertainty and exchange rate volatility are holding back UK exports. Anna Tobin reports
The BCC and Bibby Financial Services surveyed 1,140 internationally active UK businesses. They found that general uncertainty around Brexit was considered the top barrier for UK exports, listed by almost half (47%) of businesses. This was followed by specific concerns around tariffs (35%) and exchange rate volatility (33%). Only 7% of internationally active businesses said that they do not face any exporting barriers.
When asked about business changes experienced over the past 12 months, 31% of businesses reported that they had increased the volume of inventory held; 15% reported that it already takes longer to transport goods to and/or from overseas; and 29% reported that it takes longer to get paid by customers.
“UK businesses are facing unprecedented levels of uncertainty on multiple trading fronts – and, unsurprisingly, they’re holding back on importing and exporting,” said Dr Adam Marshall, BCC Director General. “Just this week, the Government finally provided some certainty around tariffs – but, the damage of uncertainty was already done for many firms.
“While international trade always involves an element of risk for businesses, Government should be working to lower barriers rather than increasing them. Preventing a messy and disorderly Brexit is the immediate priority, but ensuring continuity of trade with third countries and providing firms with clear and timely information about future trade processes, would go a long way to removing unnecessary obstacles.”
Edward Winterton, UK chief executive of Bibby Financial Services, added: “Chronic uncertainty resulting from Brexit is undoubtedly stifling international trade amongst UK SMEs. Importers and exporters are in limbo, and many are postponing investment decisions, while they await further information. Many others are focusing resources on ensuring they’re prepared to deal with the potential impacts of a no-deal scenario.
“SMEs are telling us that they need clarity over the detail, and it’s imperative that the Government looks to provide this as soon as possible to enable businesses to trade with confidence, both domestically and internationally.”