The number of UK SMEs conducting international trade dropped to 26 per cent in Q4 2017. In comparison, 52 per cent exported across the globe at the end of 2016.
According to the Barometer, SMEs have remained “reluctant to pursue overseas opportunities due to market uncertainties. The future outlook for international trade also looks gloomy going into 2018, with 75 per cent of UK SMEs expecting trade to decline or remain stagnant over the next 12 months.”
On top of reservations around international trade, UK SMEs were pessimistic about domestic opportunities. While 43 per cent of bosses thought their companies would grow by five per cent in Q1 2017, the number dropped to 38 per cent in 2018.
“After a year of Sterling fluctuation, inflation fears and obfuscation around the government’s Brexit negotiations, it’s little surprise that our SMEs’ appetite to trade internationally is at rock bottom,” Jeremy Cook, chief economist at WorldFirst, said. “There were too many unknowns in 2017 and international trade suffered as a result.
“A positive that has come from such a negative year is that UK SMEs are seemingly drowning out the Brexit noise. Since the end of 2016, a significantly larger contingent of small businesses feel positive about leaving the EU. The pound is stronger than it’s been since the referendum and many SMEs may finally have plans in place for a post-Brexit world.”
As was suggested by Cook, 41 per cent now feel positive of Brexit, an increase from 33 per cent in Q4 2016.
“Despite largely negative sounds from UK SMEs over the last quarter, there were signs that small businesses may look to return to international trading in the longer term,” WorldFirst explained.
“The Barometer recorded increases in the number of UK traders exporting across all regions, including Western Europe, North America and Asia, proving there are growth opportunities for those who are confident enough to trade beyond our shores. This was reflected in average trading amounts, which rose consistently in 2017. In Q4 2017, average monthly trading amounts rose to £45,536, increasing from £45,000 in Q3.”