Overseas markets provide real opportunities for many UK companies, but in a time of economic uncertainty the risks of trading overseas are very apparent. International Manager Peter Brinsley tells Vfiles how invoice and trade finance facilities can provide companies with a means to successfully address some of the key financial challenges facing exporters.
The giant container ship on its way from Asia to these shores, its deck stacked high with consumer goods, has become one of the iconic images of the age – a powerful symbol of the shift in manufacturing power from West to East.
Less well publicised are the ships and trucks setting out in the opposite direction, and yet the truth is that UK companies are still very much in the business of selling to customers around the globe. Indeed, while Britain can no longer describe itself as the workshop of the world, exports are vital to our economy, and over the past couple of years we’ve seen a concerted effort by Government to encourage more businesses to tap into overseas markets.
From the Whitehall perspective, efforts to boost exports in both goods and services tend to be described in the language of big-picture economics, so there is much talk of Britain “paying its way in the world” and the need to “rebalance the economy”. From the perspective of a small or medium-sized company there are arguably more pressing reasons to look overseas. At a time when the domestic market remains subdued, a significant number of companies are finding opportunities overseas, both in Europe and the fast-growing markets of Asia and Latin America.
Admittedly recent months have been difficult, with the ABN AMRO Commercial Finance cashflow barometer survey showing a 9% decline in export turnover in the first three months of 2012 when compared with the previous quarter. However, the longer-term trend remains moderately encouraging, with first quarter turnover posting an increase over the same period a year earlier.
There has also been some welcome news from the Office for National Statistics. While February data showed a decline of 1.1% manufacturing output, the latest figures show the sector bouncing back in March with an increase of 0.9%. While these sharp fluctuations month-to-month reflect an uncertain economic backdrop, what you can say is that manufacturers, many of them exporters, are fighting hard to win orders and maintain production.