Chamber warns firms need Brexit backup plan
ACCORDING to the British Chambers of Commerce International Trade Survey, 25 per cent of Midlands firms that took part in the survey reported that they’d seen growth in sales to Western Europe compared with 18 per cent that reported a decline.
And 19 per cent of firms reported growth in sales to Central and Eastern Europe compared with 12 per cent that said sales had fallen.
Net export sales growth was also recorded for China (eight per cent), India (five per cent), Australasia (10 per cent), Middle East & North Africa (three per cent) and North America (14 per cent).
But for many of the 388 Midlands firms that completed the survey, of which 186 were exporters, the outcome of Brexit talks was seen as a potential risk to continuing to trade with the EU, with 43% per cent saying they were concerned about tariffs and 36 per cent worrying about customs barriers. A similar picture emerged when it came to import purchases.
Work permits and visas were a worry for 11 per cent of respond- ents and 8 per cent were concerned about having access to foreign workers.
Over a quarter (27 per cent) of firms said they did not foresee any significant barriers to international trade while 38 per cent said they had already started or planned in the future to revise growth strategies.
However, 41 per cent of respondents said they expected their costs to slightly increase in the next 12 months as a result of the devaluation in sterling, with 27 per cent saying they expected significant increases.
Only five per cent of firms expected their costs to slightly decrease, with two per cent expecting a significant decrease.
The survey also found that many businesses trading abroad were leaving themselves exposed to currency fluctuations, with nearly half (45 per cent) of Midlands firms not taking proactive steps to manage currency risk.
Chris Hobson, Director of Policy at East Midlands Chamber, which was one of six Midlands Chambers’ members included in the survey and which together make up the Midlands Policy Group, said: “The findings highlight the extent to which the depreciation in sterling is expected to compound the price pressures on firms, underlining the need to ease the domestic cost of doing business.
“There is also a clear need for more support and information for exporting businesses on the importance of managing currency risk.”
He added: “April marks the start of the financial year in which we are due to formally leave the EU and we know that many businesses have not yet made any provision or plans for trading post-Brexit.
“This may be because there has been so little information about what sort of deal we’ll have, but firms shouldn’t just sit back and wait for Brexit to happen to them, they need to have contingency plans and they need to start pulling them together now.