·         BCC report reveals a third of manufacturers want improved support from the Government to help them export
·         A quarter of UK manufacturing companies do not trade overseas
·         Companies identify export controls as the top barrier to doing business abroad
 

 In a comprehensive review launched today by the British Chambers of Commerce (BCC), entitled “Manufacturing for export: Make or break for the British economy”, UK manufacturers identify the barriers to export, and call for additional support to ensure growth in the sector. 

Incorporating a survey of 500 manufacturing companies, 19 in-depth business case studies, and a thorough analysis of economic statistics, the report reviews the obstacles faced by UK manufacturing firms, in addition to recommendations on Government policy. It follows the publication of BIS’  Growth Review Framework for Advanced Manufacturing, and ONS statistics revealing the UK trade gap had widened. 

In our survey of 500 companies:
 

  ·         27% of respondents said that they didn’t export at all, while a further 15% only made 10% or less of their turnover from international trade

 ·         A third (34%) exported over half their turnover; 39% exported under half, and a fifth (20.3%) exported under 20%. 

·         Nearly half of businesses (47%) who don’t export believe there is sufficient business in the UK for their needs, while almost a quarter (23%) did not have a suitable export product. 16% said it was because they had a limited knowledge of exporting.

 ·         46% of exporters said that their export volumes had grown during the past five years, while only 11% said they had shrunk. For 41%, export volumes have stayed the same.

 ·         82% of firms identified export controls as an issue for their manufacturing and export potential; followed by the price of sterling, regulation and access to finance.

 ·         UK manufacturers called for continued low interest rates (38%); better export support from the Government (33%); and improved access to growth capital (22%) to help them grow.

Commenting, David Frost, the BCC’s Director General, said:


“Britain’s manufacturing industry is alive and well; strong, productive and innovative. No longer the Cinderella sector, it is the powerhouse of the UK and will play a vital part in securing our future economic growth. But this revival has to be lasting and sustainable. The Government must prescribe the right policies to encourage growth and allow manufacturers to export their way out of the recession.
 
“British exports haven’t grown as predicted despite the competitive valuation of sterling. Our industry needs to rediscover its trading spirit, and become far more proactive when it comes to exporting. Businesses must look for export opportunities for their products – especially in high-growth developing markets.
 
“Long-term Government support is vital. State-backed trade promotion and improved export support will stimulate the UK’s current and future exporters. Governments in all major developed economies provide business with international trade services to help them to access new markets. The UK must do the same. We urge the Government to think manufacturing in everything that it does to ensure 2011 is a Year for Growth for UK industry.”  

While the UK is the 7th largest manufacturer in the world[1], it has witnessed a decline in its overall global share. Exporting is central to many manufacturing businesses who often find that the home market is too small for sustained growth. For many manufacturing firms, lack of trade finance is a key barrier to exporting. Problems during the recession, coupled with a lack of access to export finance for riskier markets, have left many British exporters in a weak position compared to rivals from exporting nations with access to state-backed schemes.

 

Recommendations for improving exports amongst manufacturing firms include the creation of a state-backed trade credit insurance scheme; the broadening and simplification of R&D Tax Credits; clarification around the impact of a reduction of Capital and Investment Allowances on manufacturing firms; and improved education and better promotion of UK trade.