Whilst international trading environment remains challenging, businesses anticipate growth in exports

Timed to coincide with the start of International Trade Week, the Institute of Directors is today publishing a report outlining business leaders’ experiences of the current international trading environment, whilst setting out the actions the UK government should take to boost confidence going forward.

The report, ‘Restoring Confidence in Cross-border Trade’, finds that nearly half (47%) of businesses are still finding Brexit challenging, while only a third (33%) can envisage opportunities materialising from Brexit, and 28% stating that supply chain disruption is having a negative impact on their organisation.

At the same time, 42% of businesses that trade internationally expect to see an increase in their exports in the coming year, compared with only 22% expecting a decrease, suggesting net optimism about future trading prospects.

The IoD has identified key areas where the government can boost confidence in international trade, including:

• Working together with EU leaders to make customs processes as seamless and straightforward as possible, as border bureaucracy on both sides of the Channel is slowing down trade.
• Accelerating plans already in train to digitise cross border services to ensure trade is as seamless as possible.
• Better communicating guidance from SME chapters in Free Trade Agreements (FTAs) that offer clear and concise advice on how to engage with the agreements, the benefits they offer and connections to local contacts.
• Re-establishing a permanent supply chain taskforce to improve communication between business and government, conducting analysis of supply chain disruption, and intervening where long-term shortage areas are identified.
• Publishing clear guidance on how businesses can begin the transition to trading sustainably.

Emma Rowland, IoD Policy Advisor for Trade, said:

“There is no doubt that smaller businesses in particular are finding the current international trading environment challenging. Importers and exporters feel especially constricted by the UK’s new trading relationship with the EU.

“The hangover from the pandemic has worsened the situation, with the UK’s trade recovery being sluggish and business being hampered by supply chain disruption.

“It is therefore encouraging that, in spite of these barriers, businesses are anticipating an increase in exports over the coming months. There are opportunities that give traders reason to be optimistic. New markets are being opened up as the government signs trade deals across the globe, and the digitisation of trade processes will help to reduce friction at the border.

“However, the government must first tackle the immediate barriers, and better work with businesses to address the challenges they are facing. Most importantly, being the UK’s closest neighbour, the UK’s trading relationship with the EU must be the priority.”

The full report, ‘Restoring Confidence in Cross-border Trade – an agenda for the UK Government’, is available here.