Only 27 per cent of exporting SMEs reported an increase in overseas sales during Q2 2024, marking a slight improvement of three percentage points since the pandemic, but still highlighting a general stagnation in export growth.

The outlook is particularly stark when compared to pre-pandemic and pre-Brexit figures. In Q2 2018, only 14 per cent of SME exporters reported a decrease in overseas sales, whereas that number has risen to 21 per cent in Q2 2024.

While domestic demand remains robust, with 37 per cent of SME exporters reporting an increase in domestic sales, the disparity between domestic and overseas sales is evident.

Despite the overall sluggishness, there is a glimmer of hope in the manufacturing sector. Among SME manufacturers, 31 per cent reported an increase in exports, outperforming both SME service exporters supplying end customers (B2C) at 25 per cent, and those supplying other businesses (B2B) at 24 per cent.

However, the outlook for advance orders is less encouraging across all sectors, with only 28 per cent of SME manufacturers, 23 per cent of B2C firms, and 20 per cent of B2B businesses reporting an increase.

William Bain, head of trade policy at the BCC, said: “Our research shows the government will have its work cut out in trying to revitalise UK exports, as they continue to underperform. But it has already taken some steps to help firms turn a corner. This includes its trade strategy announcement, restarting trade negotiations in vital markets, joining the World Trade Organisation’s e-commerce agreement and committing to improving our relationship with the EU.

“Legislation announced in the King’s Speech also has the potential to ease the problems of regulatory divergence for regulated products sold into the EU. Business wants to work with government to put in place a framework that makes use of all the UK’s advantages and makes it easier to access incentives for exports. A focus on critical minerals supply chains and taking full advantage of the opportunities offered by digital trade would also have real value for our firms.”

Fibre2Fashion News Desk (KD)