The Numbers Game
Once a quarter, at about this time, the trade statistics come out. You would have to be living on the moon to escape the numbers in the news about Eurozone members in difficulty, so waiting for the effect of the Eurozone problems to show up in the trade statistics has been a bit like waiting for the other boot to drop.
Based on the statistics just out, the year on year figures still look pretty rosy with a 14 per cent rise in exports to the EU 27. Look at the rolling year and you’ll find that the region sold fractionally less to Europe in the first three months of 2012 than in the last three months of 2011.
We’ll have to wait a while to see whether that’s a trend, but it’s hard to imagine a time when the EU won’t be hugely important to exporters in the East of England and nationally.
The East of England sent nearly 60 per cent of its exports to the EU 27 in the first quarter of 2012. Germany, France, the Netherlands and Belgium are four of our five biggest overseas customers and Europe is particularly important to companies taking their first steps in exporting. So I wouldn’t advise any company to stop looking for business in Europe, but any entrepreneur will tell you that if your existing customer base stagnates you need to look for new opportunities.
For a long time UKTI has been encouraging business to explore less developed markets, both those enjoying higher growth now and those with the potential to expand in the years ahead. Last quarter’s drop in sales to the EU 27 has been more than offset by increased exports by East of England companies to other markets, including for example a 15 per cent rise in sales to Latin America and the Caribbean and an impressive 22 per cent hike in sales to sub-Saharan Africa. So it looks as if some companies are taking that message on board.
Still on the numbers game, I’ve seen a couple of interesting pieces of research in the last week or so. One, from BIS (Department for Business Education and Skills) economists, emphasises the contribution of SMEs employing fewer than 10 people to export performance. Nationally, in 2009 these smaller firms accounted not only for 27 per cent of exports to the EU but for over a fifth of exports outside Europe, so don’t feel that because your firm is small it can’t do successful business overseas. Plenty of small firms do just that.
At the same time, at last week’s summit ‘Leading from the Middle’, drawing on a report by GE Capital Bank, Vince Cable and the CBI talked about the 10-20 per cent gap between the export growth achieved by UK Mid-Sized Businesses and the performance of similar businesses across Europe.
One more telling piece of research is that according to the CBI almost three-quarters of UK firms trading abroad have no formal export strategy in place. It is possible to do well overseas simply by responding to opportunities as they come up, but think how much more you could achieve with a bit of planning.
So what’s UKTI doing to help? A great deal. You can see our full range of services at www.ukti.gov.uk or ring 0845 641 9955. Helping companies plan their export activity is an absolutely fundamental part of what we do but I will just pick out a couple of other things.
As well as offering encouragement and advice we have practical help available in the form of trade missions (first-hand experience of China, Brazil, Russia, India or Mexico, anyone?). We also now have specialist trade advisers working with mid-sized businesses in this region, tailoring advice and support to their very specific needs.
In this Olympic year when the global spotlight is firmly on the UK, we are more than ever encouraging business to get out into the export market. Statistics can be fascinating but the real message is that, whatever the size of your company and wherever in the world you want to sell to, there’s good business out there. UKTI can help you find it.
Follow us on @UKTIEast