Accept Cookies?
Print Page | Contact Us | Sign In | Join Us
News & Press: Blog

Export survey reveals high levels of optimism for global trade

10 March 2017  
Posted by: IOE&IT News
Share |

positive graph on world map on computer screen

 

The Institute’s most recent Export Optimism survey has shown a strong energy for growth, with 97% of respondents expressing optimism for global trade opportunities.

Members’ positivity is despite a myriad of political risks - fears of a growing protectionist agenda in the US, national elections across Europe potentially upsetting the status quo and Britain's possible fractious divorce proceedings from the EU.

Greatest optimism was for global trade (97%) and trade with the EU - with 93% of respondents saying they are still optimistic for export opportunities in the EU.

Despite the protectionist rhetoric from the White House since President Trump took office, respondents expressed a moderate level of optimism for trade opportunities in the US.

However, respondents showed caution for trade opportunities with India and China, whilst 21% indicated that they saw no optimism for opportunities in Russia.

Eighty-seven per cent of participants believed there would be a loss of trade when we leave the EU, but the majority of these thought this would be less than 20%. Interestingly, 13% predicted that we would not lose any trade.

Despite these assertions, uncertainty surrounding Brexit remains. Many (40%) expressed concern at the uncertainty over negotiations and their outcome - with early indications that relocation would preserve a competitive edge. One participant commented: “Relocation to mainland Europe will allow us to maintain and grow our business with our nearest trading partners which is vital to our business going forward.”

Looking ahead, nearly a third (30%) of respondents are looking to extend their overseas markets in 2017. Indeed, 54% stated that growing these was seen as the single biggest opportunity for their company this year. This optimism extends to investment plans, with nearly a fifth (19%) planning to invest in marketing and 15% looking to develop new products. A further 12% intend to invest in plant and/or machinery or extend their premises.

When looking at further opportunities for 2017, 12% recognise the value of extending their offer by adding services. This indicates that manufacturing companies are considering the option for generating an additional revenue stream.

A strong appetite for exports is reflected by the fact that a 3:1 ratio of respondents are looking to extend their markets overseas.

Almost two thirds (61%) of respondents have contingency plans in place for foreign exchange risk and just over half (52%) have a plan for credit risk. Whilst half of respondents have a contingency plan for cyber attacks, only 30% have any strategies to avoid the risks involved with customs compliance.

Institute Director General, Lesley Batchelor OBE, said: “The importance of businesses managing currency risk is a fundamental part of ensuring profitability when trading in international markets.

“The survey results indicate that 60% have plans in place for this, which is a significant level, however all businesses should do so. In practice, use of forward foreign exchange contracts and matching of currency payables and receivables are the most frequently used methods of managing this risk.”

 

Read the full report here