UK SMEs are expecting a boost in overseas sales over the next year, according to research by international payments company OFX. And this includes in Europe, despite Brexit uncertainty.
The data shows that UK SMEs are increasingly optimistic about international trade in general, even as uncertainty grows as the country moves towards leaving the EU in March 2019.
No Brexit effect
The survey included 500 senior managers and small business owners. It revealed that 62% feel confident about doing business outside of the UK. Almost half said that uncertainty caused by Brexit negotiations surrounding future trade deals for the UK has no effect on their ambitions for international trade. Only 15% said that it had reduced their interest in doing business with companies outside of the UK.
And evidence supports this surge in optimism www.turnerlittle.com discovered from the report. Since last year, almost half of SMEs that export business and services have increased overseas sales. They have increased international revenues by an average amount of £50,000. Just over 40% reported that they expect to see an increase in overseas sales over the next 12 months. This is a jump from last year, when just 17% expected to do the same.
Europe still popular
Perhaps surprisingly, western Europe remains the favoured export market for SME respondents. With just nine months until the final Brexit ‘deal’, it could have been expected that Europe would fall in popularity, but this isn’t the case. Instead, the USA has decreased dramatically in popularity as an export market.
In 2017, it was a very different story. Back then, small businesses were looking at the USA as the most attractive market for exports (62%), while western Europe was right at the back with just 20%. In this survey, around 45% said that western Europe is their key export market, which strongly suggests that Brexit uncertainty isn’t holding small businesses back.
USA and the Commonwealth
Just over a third now consider the USA as an attractive export market, down 26% since last year. While it’s not clear why this has happened, it could be down to Donald Trump’s tough stance on trade.
Commonwealth markets continue to divide opinion as potential targets for post-Brexit trade. Young entrepreneurs reported feeling optimistic about training with Commonwealth countries, with just over 60% of entrepreneurs aged between 18 and 40 seeing this as a viable option for their business. However, entrepreneurs older than 40 disagreed, with 51% dismissing Commonwealth trade as an option for their company.
James Turner, managing director of turnerlittle.com commented: “It’s interesting to see that the most optimistic SMEs are in England, with a distinct regional difference discovered regarding confidence in international trade.
“In England, 72% of SMEs feel confident about overseas business, but in Scotland this stands at just 40%, while Northern Ireland is at 48% and Wales is at 58%. Additionally, respondents across Wales (50%), Northern Ireland (46%) and Scotland (36%) say that there is not enough support for British businesses when it comes to international trade.
“It’s likely that we will see increased government support for British SMEs as we move out of the EU, so that more are encouraged to explore new international options for trade.”
About Turner Little
Founded in 1998 in Yorkshire, UK, Turner Little is a specialist UK and offshore company formation, banking and corporate services provider. Our services include company formation, UK and offshore banking, asset protection, credit correction/repair, trademarking and trusts. Other services include Internet services, mail forwarding, wills and probate. Turner Little’s vision is to offer the best possible service, together with market leading products.
