Recovery in exports, but uncertain outlook for post-Brexit UK, says survey
A recovery in UK exports reported in February by The Office of National Statistics (ONS) has been short-lived, according to a new survey.
It comes as figures from Germany suggest post-Brexit trade between the two countries has dropped sharply.
German-British Chamber of Industry and Commerce members cited logistical problems related to Brexit as the biggest concern in a 2022 business outlook survey.
The latest Exporter Monitor by Coriolis Technologies and the Institute of Export & International Trade (IOE&IT) data also suggest that the number of exporters in the UK fell in April 2022 by 3.1 per cent.
The survey reveals that a total of 61,915 businesses exported in April 2022, with a combined turnover of £4,857,689,565 and 13,302,762 employees.
At the same time, the number of employees working for exporting firms declined, by nearly six per cent, while exporter revenues dropped by nearly four per cent compared to March 2022.
Outlook for trade looks difficult
The outlook for the coming months looks difficult for UK exporters, especially given the current geopolitical situation.
The survey suggests that there could be a mild uptick during May, but the June and July forecasts show that exporter counts will flat line at best. At worst, any May growth will be short-lived.
The Financial Times has also reported that UK trade with Germany has dropped sharply since 2016, lagging behind overall import and export levels in both countries
Data from Destatis, the German office for national statistics, revealed that German exports to the UK fell 3.9 per cent in March compared with February and were down 0.3 per cent on March 2021.
Compared with March 2019, exports to Britain were down 27 per cent, even though Germany’s overall exports grew by 16 per cent, the report said.
Is this because of leaving the single market?
The figures reflect the gradual decoupling of the UK manufacturing economy from the EU single market, said Ulrich Hoppe, Director-General of the German chamber.
“From a German perspective, the UK is to some extent being taken out of EU supply chains . . . because it has become more complex and expensive [to trade with UK] and that has an effect on bilateral trade,” he said.
The UK fell to the bottom of Germany’s top 10 trading partners for both exports and imports, and dropped to 13th place as a source of German imports in 2021.
Mixed confidence levels for UK businesses
Half of the companies surveyed were positive or very positive about their current and expected future performance in the UK, with half planning to increase their investment and to recruit more staff.
However, more respondents expect the UK economy to continue to ‘cool’ in the coming 12 months: 38 per cent expect a worsening performance and only 23 per cent expect it to perform better.