The latest DHL/BCC Trade Confidence Index, which measures the UK’s exporting health by drawing on surveys of exporters, reveals that the fourth quarter of 2011 showed a 3.7 per cent increase in exports on the same quarter the previous year.

However, the results also show that a quarter of businesses (25 per cent) have seen a decrease in export orders over the last quarter, compared to 24 per cent in Q3, 22 per cent in Q2 and 12 per cent in Q1.

The percentage of exporters confident of increasing their profitability has fallen steadily during 2011, with 50 per cent of companies feeling confident in Q2 but only 43 per cent feeling confident by Q4.

Furthermore, only a fifth of companies (20 per cent) expects to take on new staff in the next three months.

Phil Couchman, CEO of DHL Express UK and Ireland, comments, ‘With the latest figures in the report showing a weakening in export orders and indeed overall business confidence, the reluctance from exporters to invest is a concern.’

Worries over the exchange rate also rose to the highest level since the fourth quarter of 2010 with 37 per cent of respondents reporting it as more of a concern than the last quarter.

However, manufacturing firms see some positive signs with an increase in their domestic orders from -2 per cent in Q3 to 2 per cent in Q4, and profitability confidence rose among firms from 32 per cent to 36 per cent.

British Chambers of Commerce director general, John Longworth, remarks, ‘As problems in the eurozone rumble on and sterling remains strong our exporters are facing a challenging trading environment.

‘Falling confidence means many exporters are delaying decisions to invest and take on staff, affecting the UK’s economic prospects and the move towards ‘rebalancing’ we need to see.’