Special report - Export for growth
HMRC issued the export statistics for March 2017 last month, showing the value of UK exports increasing to £31.4bn, split between EU exports of £15.3bn and non-EU exports of £16.1bn. Both EU and non-EU export levels rose significantly on 2016 levels (EU growth 26%; non-EU export growth 28%).
One great advantage that we have in the UK is that we carry before us a great reputation for quality and dependability. The business executives who participated in this report all comment on how the UK carries great kudos in export markets across the world. The Centre for Economics and Business Research conducted a survey a few years ago showing that products labelled ‘Made in Britain’ commanded a considerably higher premium when sold abroad than those which had no declared country of origin. They found that two thirds of customers were more inclined to purchase products carrying the Union Flag; customers in new and emerging markets are willing to pay up to 7% more for products carrying the ‘Made in Britain’ label than for those products without a declared country of origin and 31% of consumers knowingly paid a premium for products from Great Britain. The report also found that a premium gain of £1.5bn could be achieved in the US and China alone.The Office for National Statistics found that only 10.8% of UK businesses exported in 2014 and this number is not thought to have changed in 2015. One interesting aspect of exports is missing from the statistics and that is the level of profitability. UK business, quite correctly, is focused on its bottom line whereas the UK government tends to focus on headline figures of gross exports. I accept that not all export contracts are profitable and some businesses have found that their forays into overseas markets have not always been profitable. However, research tends to support the notion that the most profitable companies are those which export (Wagner 2008, 2012).
There are opportunities for more of our members to become involved in export and I sincerely hope that by reading this report you might be encouraged to consider adopting an export strategy. We are embarking on a new and exciting chapter for UK business and this could be a brilliant opportunity to grow your business through exporting.