British SMEs are ‘missing opportunities’ in faster growing developing countries, says Barclays bank’s head of trade.
British SMEs are ‘missing opportunities’ in faster growing developing countries, says Barclays bank’s head of trade.
Iain MacDonald, head of trade product at Barclays Corporate, says there has been an increase in the number of small and medium-sized enterprises (SMEs) seeking export finance but most aim to send their products to the established markets of Europe.
His comments come as Britain’s trade deficit reached £4.1 billion in November, with the trade gap in goods, as opposed to services, hitting a record high.
But MacDonald points to ‘a recent wave’ of encouraging export data from early-stage and growing businesses embarking on international expansion.
He says: ‘Encouragingly we have seen a recent increase in the number of SMEs seeking export finance, although this is often because these mid-market businesses feel they can simply no longer rely on the UK for growth. While it is positive that many smaller companies are taking up the export mantle, their focus is primarily on Europe, which is still forecast for relatively low growth, again missing opportunities in developing economies.’
According to the Office of National Statistics, the UK trade gap of goods and services increased £100,000 to £4.1 billion in November from a revised £4 billion gap in October.
On goods solely, the trade deficit widened to £8.7 billion in November, from £8.5 billion the month before – the biggest deficit since records began in 1980. UK exporters made strong gains, particularly in car sales to the EU and Russia, in the month, posting a rise of 4.1 per cent to reach a total of £23.6 billion. But the increase failed to close the gap with imports, which also rose in the month, up 3.4 per cent to £32.4 billion, driven by oil, aircraft and aircraft parts imports.
Jeremy Cook, chief economist at currency provider World First foreign exchange, says he expects the overall trade deficit to continue to widen.
He comments: ‘The fact that these imports are higher can be looked at positively when combined with the recent strong data from the manufacturing sector and, given exports have risen, we are seeing some ‘rebalancing’ in the UK economy, helped by the weak pound. However, crude prices are only likely to continue increasing in the short term and therefore this gap should continue to widen.’
