The second DHL/BCC Trade Confidence Index, a new measure of the UK's exporting health, reveals that while growth among UK exporters continues, it has slowed during the last quarter. The index draws upon a survey of over a thousand exporters and an analysis of export documentation (required of all UK companies exporting goods outside the EU).


Trade documentation data for UK goods exports in Q3 2011 shows a 3% increase on the same quarter last year, and 3% on the previous quarter demonstrating growth in export goods continued.

However, the survey results show that firms recorded weaker export orders than export sales results, suggesting a slowing of export growth towards the year: Almost a quarter of firms (24%) reported a decrease in export orders (up from 22% in Q2 and 12% in Q1), and only 35% say orders have increased (the joint lowest level since Q3 2009).

Over half of exporters that believed their turnover and profitability would improve over the next twelve months, though these figures fell slightly on the quarter. 55% of firms believed turnover would increase (down from 58% in Q2), and 16% believed it would decline (up from 12%). Confidence among exporters in increasing profitability fell slightly to 48% (down from 50%), while 24% (up from 22%) believed it would worsen.

Continued uncertainty around the resolution of the Eurozone debt crisis, and the fragility of the UK's economic recovery means British exporters are reticent to take on more staff. Exporting firms' plans to take on more staff in the next quarter are anemic. A fifth (19%) of exporters expect to decrease their workforce, the highest level since the third quarter of 2010.

Commenting on the results of the index, Phil Couchman, CEO of DHL Express UK and Ireland said: "The results of the second DHL/BCC 2011 Trade Confidence Index highlight that we cannot underestimate the challenges ahead for exporters, particularly in light of the serious problems facing the eurozone, which remains a major trading partner for small businesses in the UK.

"Steps must be taken to support those looking to target overseas markets, particularly SMEs, who are less able to ride the trends of the economic cycle than their larger counterparts. Now is the time for businesses to expand internationally; with our collective support we can help SMEs exploit the global opportunities open to them, and in turn rebalance the country's economy."

John Longworth, Director General of the British Chambers of Commerce, said: "The UK's exporters are still performing well, and the results of the Trade Confidence Index show the trend of growth in exports continues. However, uncertainty around the UK's recovery combined with the eurozone crisis, means that growth has slowed in the last quarter. Order books have weakened, confidence in increasing turnover has softened and exporters' desire to expand workforces is muted.

"There are some great examples of British small- and medium-sized businesses exporting goods and services across the globe, but we need more of them, and that relies on more support and trade finance. If we're to see the rebalancing of the economy that we need for recovery, British businesses must be encouraged to take risks and seek out new markets, particularly those outside Europe. The Chancellor must use his Autumn Statement to deliver confidence to exporters, and encourage those looking to trade abroad for the first time to take the leap."

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