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Survey shows British SMEs are not shaken by Brexit
Each year at OFX, we take a pulse-check on how UK businesses are feeling about international trade, and this year we found a few surprising insights from the results. The survey, commissioned by OnePoll in June 2018, surveyed 500 owners and senior managers at UK businesses with between 10 and 249 employees. Here’s what we found:
When it comes to Brexit uncertainty, 46% of respondents said that it has had no effect on their appetite for international trade. Despite the uncertainty surrounding the terms of Brexit, small British businesses are increasingly optimistic about international trade. In fact, the majority expect to increase overseas sales in the next year. And it’s not all talk. Since 2017, 47% increased overseas sales, growing international revenues by an average of $50,000. It’s good to know that political uncertainty hasn’t dampened the spirits of UK businesses.
Brexit leavers were found to be the most confident about international sales. England had the highest percentage of leavers in the EU referendum compared to other UK countries (with 53.4% voting leave). In Scotland (where only 44.4% voted to leave the EU), respondents feel the least confident about international trade. Just 40% said they felt confident vs. 72% of England-based SMEs. Seemingly, Brexit opinion and confidence levels are linked.
The survey also showed that the global appeal of ‘Brand Britain’ is a bonus when trading internationally. This year, more than half of small businesses trading internationally (53%) said that their company’s ‘Britishness’ is an asset when selling goods and services outside the UK.
Jake Trask FX research director at OFX said: “The rise of marketplaces like eBay and Amazon means it’s now easier than ever for small businesses to start selling overseas, no matter where they are based. This year, events like the Royal Wedding have shown that there’s a real opportunity to tap into the global appeal of Brand Britain. London brands don’t have the monopoly on ‘Britishness’, so I’d expect businesses across the UK to leverage their unique heritage and boost their international sales in the next twelve months.”
Europe also regained popularity as an export market, with 45% choosing Western Europe as their favoured market for international growth. This was a 25% boost in popularity up from last year’s survey and it seems that Brexit-related uncertainty is no longer holding small businesses back from their EU trade ambitions.
Over to the US, the export market fell out of favour with only 36% favouring the US, comparative to the results from last year which indicated that 62% of people voted the US export market most attractive. This is potentially because Trump’s tough trade strategy (which includes trade wars with both Europe and China, and additional tariffs placed on goods and services) has spooked foreign businesses.
The markets are constantly shifting in response to the geopolitical events happening around us all the time. This can mean potential currency volatility, which can impact businesses looking to expand internationally.