UK SMEs are increasingly looking to export goods and services, according to the latest SME Confidence Tracker report from business funder, Bibby Financial Services (BFS).
Findings from the Q2 research, undertaken in June ahead of the EU referendum, show the proportion of businesses investing in overseas trade increased to 12 per cent – more than double that in Q3 2015 and the highest since the start of 2014.
Commenting on the findings, Mark Lindsay, Managing Director of Trade and International at BFS said: “Even before the referendum, an increasing number of UK businesses were eyeing-up opportunities in overseas markets.
“Though much talk prevails about the challenges businesses face in the wake of the referendum, there are also opportunities. With a weaker pound, many SMEs – particularly those who manufacture or source components from within the UK – are looking to increase export volumes with customers overseas.”
Despite the increase in those investing in overseas trade, the report did, however, reveal an overall drop in investment intentions across businesses, with over a third (39%) of SMEs not looking to invest over the next three months. For more than a quarter (27%), the uncertain economic environment in the UK was the reason for not investing in Q2.
Just under a quarter (24%) of SMEs were focusing on building up cash reserves rather than investing and a fifth (20%) were holding back from investing because of declining sales.
However, Mr Lindsay says that BFS has seen an increase in enquiries relating to export and trade finance and currency exchange support since the referendum.
Mark Lindsay continued: “We have seen an increase in enquiries for export and trade finance, and foreign exchange services since the outcome of the referendum was known. We’re seeing business owners either looking to ramp up export quantities while exchange rates are favourable or – for those importing goods - protect themselves against further currency volatility.
“Many of the SMEs we speak with export to EU member states so the outcome of the Government’s post Brexit trade negotiations are critical.”
Sam Duong, CEO of Ming Foods, a Kent-based Chinese-food manufacturer said: “As an SME we have to get on with making the most of opportunities springing from Brexit. Thankfully exporting is part of our business and the currency movements have made that easier; our exports are up 10 percent since the referendum.”