Although the UK economy showed strong signs of stabilisation and recovery this year, this result has largely stemmed from domestic investment and increased consumer spending. Businesses are finally creating jobs and investment in the UK seems to be progressing.
There’s a general feel in the air that we’re turning a corner into a more positive time in the UK, but can the same be said for the world markets? The latest GDP figures show that growth was predominantly driven by a robust services sector, so what does the future hold for manufacturers?
With a host of contradictory reports and surveys circulating, it’s hard to know exactly what the future holds, and we certainly don’t profess to have a crystal ball!
Here’s what we think about the current state of the UK export market…
The Reality Check…
According to HSBC, although a clear majority of UK exporters expect trade volumes to increase over the next six months, export orders are continuing to disappoint – especially in certain manufacturing sectors.
These exporters are simply becoming more realistic on their expectations and predictions, not necessarily experiencing poor results.
The survey hints at the fact that the manufacturers don’t expect global demand to actually grow their overall trade, but it’s still contributing to their bottom line. One of the reasons cited for this is the exchange rate, which is now seen as a big impediment to trade growth.
It’s easy to be glass-half-full about the export market at the moment, but the fact is that many people are just becoming less expectant and reliant on it to “revolutionise” their business. It’s true that we’re faced with political and economic uncertainties, ranging from a weak Eurozone to a deteriorating outlook for emerging markets. But were our original predictions just a little too optimistic or bullish?
We’ve found that our clients’ medium and long term business prospects look significantly better when they have prepared themselves for recovery in both developed and developing markets.
We’re not recommending ignoring the uneven rates of economic growth across the world, or entering markets without thorough research – but it’s worth planning this out in advance and translating all necessary materials to hit the ground running!
Look Further Afield
The subdued yet robust recovery of the euro-zone indicates that the UK’s single largest export market is picking up, but only at a modest pace, so exporters are increasingly looking further afield for more rapid expansion opportunities.
Over the long term, our reliance on France and Germany will change significantly. For example, the share of UK merchandise exports going to Germany and France is forecast to drop from 17% in 2012 to 13.6% in 2030 – which is 20% in just 18 years!
This change will be balanced by increases from emerging markets further afield such as China and India. These two countries currently account for less than 4% of UK goods exports and this share should more than double over the next decade and a half. This rise is forecast to be almost 7% a year, so making plans and preparing your business to trade in these often unknown and distant countries is essential.
It’s much easier said than done, but are there any partnerships or specific customers in growing sectors that you can develop to aid your chances at export growth in the long term?
For manufacturers, industrial machinery and transport equipment are set to play the biggest role in driving export growth at sector level. In addition, displaying the UK’s expertise in high-end manufacturing, scientific apparatus and ICT equipment will make an increasingly important contribution to the volume of goods sold by UK firms overseas.
In Summary – Don’t Procrastinate Forever!
In light of all of the predictions, one thing is very clear as we look across the export landscape – your business can’t afford to be inert.
If you pause your plans for now and fixate on political and economic problems close to home, such as 2015’s general election, or further afield and our current stormy relationship with the EU, your failure to benefit from overseas opportunity can be easily missed. We’d love to help you make the most of it…
Bubbles is a full-service translation agency and have been helping the world’s leading brands grow their sales internationally since 2003.
With more than 3,800 translators across the globe, you can be confident that we’ve got every language covered. With over 12 years’ experience, 1100 happy clients and 52 million + words translated across 9,400 projects, we’ve got commercial and technical native-speaking translation experts for every challenge.
Get in touch and start communicating internationally today…