UK small businesses are failing to seize export opportunities, with only around a fifth (19 per cent) of Yorkshire firms currently exporting their products or services overseas, according to new research carried out by Lloyds TSB Commercial Banking.
While exporting and international trade can represent an effective route to growth for companies, the survey revealed that only 17 per cent of UK SMEs currently export their goods or services overseas, and 40 per cent neither export nor plan to do so in the future.
When asked about why they had no plans to export, almost a fifth (16 per cent) of Yorkshire firms said that it is too costly for SMEs to export, but surprisingly over a tenth of the firms surveyed (11 per cent) stated that they had simply never thought about exporting as an option.
The survey of 2,000 UK businesses also highlighted a wide regional disparity in attitudes to exporting. South East businesses lead the way with two fifths (40 per cent) of companies in the region already exporting their products overseas, the highest proportion of any part of the UK. However, almost four fifths (79 per cent) of Welsh companies asked did not currently export and had no plans to do so in the near future.
By contrast, while only one in twenty (five per cent) of businesses in London currently export their products overseas, over two thirds (69 per cent) do have plans to begin doing so within the next five years.
There was also a marked difference highlighted between sectors in the survey, with agricultural firms having the highest proportion of established exporters (32 per cent), compared to the majority of sectors registering below a fifth (20 per cent). Surprisingly, only around a quarter (26 per cent) of manufacturers are currently engaged in exporting, while half of all manufacturing firms surveyed (50 per cent) also stated that they did not currently and had no plans to export in the future.
Of those Yorkshire firms currently exporting, over a quarter (27 per cent) had been established for between one and five years before they began to look to export markets for growth, while a further 44 per cent had waited for six or more years, indicating that many companies wait until they have become more established and gained sufficient scale before looking to foreign markets.
Leigh Taylor, regional director for Lloyds TSB Commercial Banking in the Midlands and North, said:
In a climate of subdued domestic demand, it’s even more critical to look overseas. Many UK firms have traditionally looked to the EU and North America for exporting, but there are increasingly opportunities opening up further afield.
Although it’s vital that firms are cautious when branching out into the international market, it is also important that they are not put off my perceived barriers that could prevent them from exploring the potential opportunities that are offered in other countries.
The latest Lloyds TSB Commercial Banking Business in Britain report showed that one of the greatest threats to Yorkshire companies is weaker domestic demand. Firms that have taken the step into overseas markets are faring better than those reliant on home markets, making this the ideal time for local firms to start investigating the advantages of exporting.