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More Support Needed to Increase Exports

 

Expensive routes to market, lack of finance and a skills shortage in overseas trade are hampering the efforts of North East companies to build on their record international trade performance.

A BCC International Trade Survey has highlighted that expensive routes to market, lack of finance and a skills shortage in overseas trade are hampering the efforts of North East companies to build on their record international trade performanceExpensive routes to market, lack of finance and a skills shortage in overseas trade are hampering the efforts of North East companies to build on their record international trade performance.

Exports from the region have hit an all-time high in the past 12 months – but could grow even faster with a stronger focus by Government.

The language barrier and international transport links were also reasons put forward by regional businesses responding to the British Chambers of Commerce International Trade Survey.

These findings are published just a month after UKTI statistics demonstrate that regional exports continued to grow by 0.1% on last quarter (an increase of 6% on last year) while nationally they shrank by 2%.

But the number of firms involved in export in the region remains relatively low – meaning there is huge untapped potential to grow even quicker.

The North East Chamber of Commerce is now calling for increased support from the Government to complement increasing regional help to ensure the North East builds on its exporting performance of recent years and meet the Government's target of doubling overseas trade by 2020.

NECC Director of Policy, Ross Smith, said:

"There is increasing support out there for North East firms looking to open up export markets.

"NECC, as part of the consortium "Go Global North East" with NEPIC and RTC North are improving the level of export support available in the North East. As part of our agreement to deliver the UKTI contract we are currently recruiting a UK export finance adviser and two more staff to work with mid-sized businesses to access overseas markets."

NECC also operates its own export training programme, but is calling on the Government to reduce Air Passenger Duty from regional airports to help remove a barrier to new direct links overseas, introduce further and higher education business qualifications to include commercial export skills and re-establish languages within the curriculum including a cultural focus to help with future business deals.

Figures in the International Trade Survey demonstrate that:

• 70% of firms cite skills as an influential reason for not exporting
• 21% identified language and culture as barriers to entering BRIC markets
• 67% said access to finance as influential reason for not exporting
• 16% of small businesses found it 'extremely difficult' to access finance compared to 11% of large businesses who found it 'extremely easy'
• 24% stated quality of international transport connections as barrier
• 45% said cost of international transport connections as barrier
• 73% of firms have no suitable product, service or have a lack of understanding about market opportunities
• 20% feel they have sufficient UK business

"If the Government is serious about doubling exports and exploiting new and lucrative overseas markets then more support is required," added Ross.

"There is no doubt the region can achieve this, but in an era when banks are less willing to undertake trade specific credit arrangements there is a greater need for more appropriate state support to mirror that which available to other exporting countries, such as Germany, Japan, USA."

"Our survey demonstrates that businesses understand where the opportunities lie, but need more assistance reaching potential markets above and beyond current support."

Only 5% of survey respondents used the Government's UK Export Finance and of those 33% were very dissatisfied with the cost and 30% were dissatisfied with the appropriateness of the service.

Export figures for Quarter 1 2012 make for positive reading for North East exporters:

• Exports in Quarter 4 totalled £3.639bn. This is an increase of 0.1% from Quarter 4 2012, and 6% on the same period last year.
• Nationally, exports shrank by 2% quarter-on-quarter, but rose 4% on the same period in 2011.
• The number of exporters shrank slightly in the North East, compared to a small year-on-year rise for the UK.

The figures show North East exports holding up much better than the UK average, to reach another record high for the year to the end of March 2012.

This was based on a 20% rise in sales outside the EU over the last 12 months for the region's businesses, more than double the increase achieved nationally.