Gloomy outlook for SMEs as overseas trading declines
The UK’s small businesses remained pessimistic over their growth prospects for a third consecutive quarter, new data from WorldFirst shows.
Their Global Trade Barometer also reveals that export confidence has plummeted as uncertainty continues to surround the UK leaving the EU.
Levels of international trading by SMEs have declined throughout 2017, dropping from 30% in the second quarter to 28% in the third quarter.
The international payments firm have said that represents a drop of more than 20% year-on-year, meaning than an estimated 1.1 million fewer SMEs are now trading with firms overseas.
The situation is unlikely to change by the year end either, as 70% of UK SMEs said they expect trade volumes to either stagnate or decline between October and December.
A reluctance among small businesses to pursue international opportunities is shown by the fact just 22% said they plan to export in the next quarter, a 9% drop on the level of those currently exporting overseas.
Meanwhile 44% of firms say that political uncertainty, mainly driven by a lack of progress in Brexit negotiations, has further dented their confidence.
A third of businesses also admitted concerns over how they will manage currency volatility, as those operating on tight margins could be forced to cease trading entirely.
The percentage of SMEs that were transporting overseas in the third quarter was at its lowest level for two years, according to Jeremy Cook, chief economist at WorldFirst.
By holding on back on exports, many smaller firms could be severely limiting their growth potential and hindering their financial position.
Those facing difficulties are encouraged to seek appropriate advice as soon as possible, as it increases the level of potential financial support that may be available.
A range of corporate advisory services are available to help businesses reach their potential, while independent business reviews can also assist firms looking to develop more practical approaches to business.
The key is to review the range of options available before deciding on how fortunes could be turned around – while this is not always possible, acting quickly increases the likelihood of it happening.
By Phil Smith