Government failing to encourage businesses to export, finds ICAEW
Posted by Jamie Hardesty on 09 Jan 2017
New research from the Institute of Chartered Accountants in England and Wales (ICAEW) has indicated that the number of businesses exporting has not changed in the last two years.
Despite a £1 trillion export target and advertising campaign by Government, a recent study found that only 53% of businesses are exporting - no change from 2014 – and nearly all (96%) non-exporters have no plans to sell overseas in the next 12 months.
The USA and Europe remain the top export destinations and for nearly a third of exporters (30%), more than half their turnover comes from trading overseas, highlighting the importance of global markets.
This is even more significant with weaker domestic demand, a sharp decline in sterling and rise in input prices expected, indicating that export growth will overtake domestic sales in 2017.
Fewer exporters are, however, planning to enter new markets in the next 12 months, down from 33% two years ago to 25% in 2016.
Nearly all of those businesses currently not exporting have no plans to do so (96%) and this has also not changed since 2014.
There is no difference between SME and large company plans, with the most cited reason that they have a sufficient market in the UK (41%).
Worryingly for Government, only 1% of businesses plan to start exporting in the next 12 months while an additional 1% are considering it and only 5% of SMEs have started exporting in the last two years.
Of those who are looking to expand overseas less than a fifth of exporters would use Government departments which promote international trade, such as the Department for International Trade, for information and advice.
ICAEW Northern Region Director Keith Proudfoot, explained: “This research illustrates that Government is failing to encourage businesses to export goods internationally, despite a five year, multi-million pound Government campaign.
“In a post-Brexit world where business confidence is low and investment sluggish, it’s important that exporting is incentivised.
"The worry is for those companies who believe they have enough of a market in the UK, so are not doing business overseas, as weaker domestic demand is expected in 2017.“
“I know that our local Department for International Trade people do a lot of good work with SMEs in this region, but perhaps the Government should look at funnelling some of the money from DIT into directly incentivising business into export.
"One example could be introducing a voucher scheme for companies researching and developing in overseas markets.“