REPORT: Over two thirds of exporters believe turnover will improve in 12 months
The British Chambers of Commerce (BCC) and DHL Express have published new research which looks at the health of the UK’s export market. The BCC/DHL Trade Confidence Index, which measures both UK exporting activity and business confidence of more than 2,300 exporting firms, shows that more than two thirds (70 percent) believe their turnover will improve in the next 12 months, up 10 percent on the same time last year.
The volume index of trade documentation issued by Accredited Chambers of Commerce also jumped to 119.27 – its highest level on record – which shows that UK businesses are growing internationally and breaking into new markets overseas.
BCC Director General, John Longworth, applauds this business optimism but says that the UK needs to do more as a nation to ‘create an environment that makes it worthwhile to export’ so we can encourage even more businesses to take that first step towards trading internationally.
The key findings from the report are:
- Seventy percent of exporting businesses believe their turnover will improve in the next 12 months
- Manufacturing firms are more confident about turnover than they were in Q1 2014 (72 percent compared to 68 percent last quarter), but service sector firms were slightly less confident (70 percent compared to 73 percent last quarter)
- Almost half of exporters 47 percent reported increases in export sales compared with only 6 percent who said they fell
- Recruitment intentions have increased by 10 percent since Q2 2013, with 41 percent of exporting firms planning on hiring more staff over the next quarter
- More than a third of exporters 35 percent said their cashflow had improved in Q2, compared with 15 percent who said that it decreased
- The volume index of trade documents issued by Chambers of Commerce across the UK now stands at 119.27, which is the highest figure on record. The second highest was in Q2 2013 (118.12)
- The highest increase in exporting activity was seen in the East Midlands, followed by Northern Ireland and Yorkshire and the Humber
Commenting, John Longworth, Director General of the British Chambers of Commerce (BCC), said:
“Our exporters are bullish and optimistic about the future, with many expecting an increase in turnover having seen a rise in export sales in Q2. The volume of trade documents issued this quarter suggests that exporting activity across the UK is at an all time high. This is fantastic news – as boosting our international trade efforts are key to our long-term economic success.
“But there is still more the UK can do if it is to reach its full exporting potential. Our international trade survey published recently showed that less than half of the businesses have ambitions to grow overseas. I understand this to a degree, as I speak to businesses that have full order books here in the UK and don't see why they would need to start selling abroad. This is why we need to transform the domestic mindset of those businesses by creating an environment that makes it worthwhile for them to export.
“If we are going to reach the government’s target of increasing exports to £1trillion by 2020, the UK should be matching the level of resourcing dedicated to export support provided by our major international competitors. And government intervention must be more focused in areas that can really make a difference, such as providing greater access to finance to growing firms.
“As a nation we can and must do more if we are to remain competitive and stand a chance at rebalancing the UK economy for the long-term.”
Commenting, Phil Couchman, CEO of DHL Express UK and Ireland, said:
“Although the current conditions seem challenging, our UK exporters remain confident in their future turnover and are looking overseas to grow their businesses. For example, this year Chile has seen an increase in exports from Britain of 72% - equating nearly £1.2bn worth of goods, which is extremely encouraging.
“Entering a new market can be difficult, but there are a wealth of resources available, such as DHL’s Export Advisor Service, and if you know your audience and have done your market research, you can succeed in territories which at first glance might not seem obvious.
“We must make sure that UK businesses are not only equipped with the information and resources they need to do this, but that there is ongoing investment to help them on their path to meet the Government’s 2020 exports target. Our own commitment in investing £156 million shows our commitment to UK businesses and our confidence in the UK export market.”
Elon Musk's Boring Co. planning wider tunnels for freight
Elon Musk’s drilling outfit The Boring Company could be shifting its focus towards subterranean freight and logistics solutions, according to reports.
A Boring Co. pitch deck seen and shared by Bloomberg depicts plans to construct wider tunnels designed to accommodate shipping containers.
Founded by Tesla CEO Musk in 2016, the company initially stated its mission was to offer safer, faster point-to-point transport for people, particularly in cities plagued by traffic congestion. It also planned longer tunnels to ferry passengers between popular destinations across the US.
The Boring Co. completed its first commercial project earlier this year in April. The 1.7m tunnel system is designed to move professionals between convention centres in Las Vegas using Tesla EVs. It says the Las Vegas Convention Centre Loop can cut travel time between venues from 45 minutes to just two.
Boring Co.'s new freight tunnels
The Boring Co.'s new tunnel designs would allow freight to be transported on purpose built platforms, labelled as “battery-powered freight carriers”. The document shows that, though the containers could technically fit within its current 12-foot tunnels, wider tunnels would be more efficient. Designs for a new tunnel, 21 feet in diameter, show that they can comfortably accommodate two containers side-by-side, with a one-foot gap between them.
The Boring Co.’s new drilling machine, dubbed Prufrock, can tunnel at a rate of one mile per week, which is six times faster than its previous machine, and is designed to ‘porpoise’ - mimicking the marine animal by ‘diving’ below ground and reemerging once the tunnel is complete.
Tesla’s supply chain woes
Tesla is facing its own supply chain and logistic issues. The EV manufacturer has raised the price of its vehicles, with CEO Musk confirming the incremental hike was a result of “major supply chain pressure”. Musk replied to a disgruntled Twitter user, confused as to why prices were rising while features were being removed from the cars, saying the “raw materials especially” were a big issue.
Car manufacturing continues to be one of the industries hit hardest by a global shortage in semiconductor chips. While China’s chip manufacturing levels hit an all-time high in May, and the US is proposing a 25% tax credit for chip manufacturers, demand still outstrips supply. Automakers including Volkswagen and Audi have again said they expect reduced vehicle output in the next quarter due to a lack of semiconductors, with more factory downtime likely.
Top Image credit: The Boring Company / @boringcompany