Port with containers

Rise in exports presents opportunity for businesses

Darren Rigden, Partner, Audit
Port with containers
ONS figures released this week show demand for British goods and services continues to grow, with exports rising to £637 billion in the year to August 2018. This represents a 5.5% increase compared to the previous year and the 13th consecutive month where exports exceed imports.

Darren Ridgen, partner comments:

This is good news for the government which is actively seeking to promote Britain as a nation of exporters, with its intention to boost the UK’s exports post-Brexit to 35% of GDP.

Given the quality and innovation in the products and services exported from businesses in Kent and beyond, this target would seem achievable, provided these businesses are given the right support.

Although uncertainty around Brexit is a key concern for any business involved in exporting or importing, the government highlights the fact that exports of goods and services to non-EU countries has increased since 2000. Additionally the economy is operating a trade surplus of more than £40 billion with non-EU countries, where currently eight of the 10 fastest growing markets for UK goods are located. Exports of services to the key non-EU markets of USA, China and Japan have all increased by more than 85% since 2010. However, the detail within the report did acknowledge that UK trade with the EU contributed most to the narrowing of the trade in goods deficit in the 12 months to August 2018.

This prolonged growth is not surprising when you see the quality and hence demand for the goods exported by many businesses in Kent. In particular we have a reputation for exporting high quality desirable products particularly in the fashion, services, engineering and innovative sectors.

A word of caution though is that currently foreign exchange rates make us more competitive in export markets. However it remains to be seen how exchange rates will fluctuate post Brexit and whether this will continue to help exports. In addition, a lot of exports still go to Europe which is an important market, especially for many Kent based businesses. How a potential deal with the EU pans out will impact on how we trade with non-EU countries as well as EU countries so the future is hard to predict, so making it difficult for businesses to plan accordingly.

What is clear is that the government will need to stand by its promises to support exporting businesses and to provide this support in the longer term rather than becoming a short term policy which attracts positive headlines while the sector is growing and benefiting from currency movements.

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Darren Rigden
Darren Rigden
Partner, Audit and Business Solutions