In 2022, exports increased by 6.7% (after inflation), but this is still less than the value of pre-pandemic exports in 2018 and there were warning signs in the last quarter of 2022, with UK exports falling by 2.9% as economic headwinds took their toll.
The challenges facing UK exporters in 2023 are significant and the Government has much to do, to positively shift the dial in their favour.
SME’s are still waiting for improvement to exports, with 27% reporting decreased export sales in the last quarter, 47% reporting no change and only 26% seeing an increase in export sales.
The picture for future orders was even weaker with 28% reporting a decrease against 24% an increase and with the World Trade Organisation forecasting global trade growth of just 1% in 2023, down from 3% in 2022, the challenge is clear.
While China’s reopening should ease production supply chains in the near future, its suddenness could also add to fuel price volatility, and it may still create additional supply chain turbulence for exports.
More positively, the International Monetary Fund indicated that global demand may pick up, particularly in the second half of 2023, with GDP growth in China forecast to be 5.2% in 2023, and 6.1% in India.
If consumer spending does pick up in China, and beyond, then there could be the potential for higher export sales carrying on into 2024 for many verticals including automotive, machinery, electrical equipment and pharmaceuticals.
Other export markets which UK firms should be keeping an eye on are the EU, US, Switzerland, Canada, Norway, Australia, South Korea and Japan.
The potential resolution of the Northern Ireland Protocol could be hugely beneficial for exporters, as the lack of progress to date has been detrimental to the UK’s relationship with both the EU and the US.
Outside of the EU, the US is our biggest trading partner, and the one that customers tell us they are most interested in and while progress on free trade talks is stalled, it is still a very attractive and receptive export market.
The Inflation Reduction Act is a new system of tax credits for buying North American produced goods, which the EU has challenged for its ‘America First’ stance however, counter-measures proposed by the European Commission are being considered by member state governments.
While the UK Government must ensure that our own trade interests are represented, we must also do all we can to prevent an overly protectionist mindset taking hold in our major trading partner economies.
The UK Government must also look at changes to the Trade and Co-operation Agreement with the EU, to make our exports more competitive, and with lower compliance costs and red tape burdens.
There are straightforward changes that can be made to the Brexit trade deal – in areas such as checks on food exports and VAT requirements that could make a real difference.
Since our inception in 1981 Metro has crafted multi-modal export supply chains to help UK exporters optimise existing and break into new EU, US and international markets, for multiple verticals including food, retail, fashion, automotive, electronics, chemicals, industrial, and manufacturing.
To review your situation, or for advice on entering new markets, please EMAIL Elliot Carlile to discuss your options and achieve your export and import objectives. We have every continent covered with specialists locally knowing what the requirements are.