East of England businesses are eyeing new markets outside the European Union and stockpiling to ensure they can protect their supply chains post-Brexit, according to a survey.
But those firms looking to find new export partners may find themselves exposed, experts have warned.
An estimated £50bn worth of exports across the UK has been re-targeted at non-EU countries as 18% of exporters diverting trade away from the EU since the Brexit referendum, a separate study by Lloyds Bank and Aston Business School found.
MORE — Garden centre chain focuses on ‘wellbeing’ spaces as it goes for growthAston Business School analysed 340,000 quarterly export transactions made by 26,000 UK exporters over a five-year period.
The report revealed that relative growth in export values to EU countries has fallen by an average of 8.7% a year and trade relationships opened up with BRICS (Brazil, Russia, India, China, South Africa) countries, and Commonwealth nations such as Australia and New Zealand.
Meanwhile separate polling of 100 businesses in the East of England undertaken in October for the report found 26% of the region’s firms have reviewed their supply chains because of Brexit and made changes, with 9% diversifying to create new opportunities outside the EU.
The region’s exporters are also looking at further expansion beyond the EU.
According to the poll, one in six (16%) of businesses in the East of England plans to expand into new markets around the world.
The region’s firms have also implemented business continuity plans, with 16% saying they are stockpiling to ensure they can continue to supply their markets post-Brexit.
Gwynne Master, global head of trade at Lloyds Bank, said businesses faced numerous challenges but were taking big steps to address them.
“Our business customers have faced a myriad of challenges not least of which is the global pandemic.
“Despite this businesses are taking big strategic steps that will change the shape of their import and export business and the future of this great trading nation for years and decades to come.”
UK firms which export the least switched as much as 46% of new export growth to non-EU markets, according to the Lloyds-Aston report.
For the next quartile up, this figure was 19%.
However, the analysis found that it was primarily firms who have the highest export values which were benefiting from the changes.
Jun Du, Professor of Economics at Aston Business School and director of the Lloyds Banking Group Centre for Business Prosperity, warned that UK companies which export less may be exposed to risk.
“Our concern lies with the vulnerabilities faced by businesses that export less, forging these paths while lacking the infrastructure and scale of multinational firms as this reverse in trade gravity typically means higher costs and greater risk exposure,” she said.
“More needs to be done to help British businesses of all sizes navigate the future of international trade.”
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