Over half of manufacturers hit a UK growth ceiling within five years in business
Barclays encourages UK manufacturers to consider new export markets as 50% of exporting manufacturers say they wish they’d started sooner.
Barclays is recommending UK manufacturers take a more global outlook and consider the growth opportunities that exist through exporting, as new research reveals that over half (56%) of UK manufacturers hit their UK growth ceiling – a limit to the growth they can achieve by trading only within the UK – in under just five years in business.
The research, which surveyed 500 UK businesses which export, including 100 manufacturers, also provides points of encouragement for those companies who are currently only focused on the UK market and are unsure about whether they should branch out and start trading internationally.
Looking back on their experiences of trading internationally, 44% of manufacturers said they found the experience to be as easy as they had hoped, or even easier than they had expected. Half of manufacturers who already export say they wish they’d started sooner.
When looking at barriers for not exporting sooner, 52% of manufacturers said finding contacts for potential customers and partners had been their chief concern. Meanwhile, 32% of those who said they wish they’d started exporting sooner cited at least one psychological reason for not doing so, including that they ‘didn’t know where to start’, thought it would be ‘too complicated’, ‘didn’t think it would work’ or ‘didn’t think to do it.’
The top two key factors cited which made manufacturers start exporting and attracting overseas customers were increasing or changing their products and services which were better suited to other markets (49%) and in order to grow their businesses (46%).
When asked what advice they would give to other manufacturers thinking of exporting, the key pieces of wisdom included regularly liaising with customers and export agents (31%), knowing the most effective transport methods (28%) and taking a phased approach to new markets (23%).
The research also provided interesting insight into which markets offer manufacturers the best exporting opportunity. While perceived wisdom points towards the emerging BRIC countries, in fact only 27% of manufacturers would choose Brazil, Russia, India or China in their top five countries if they were starting to export again; based on their experience 75% would choose somewhere in Europe in their top five places of where to begin.
Mike Rigby, Head of Manufacturing, Transport and Logistics at Barclays said: “What is clear from this research is what a positive experience the sector is finding exporting to be, often in the absence of a lot of planning. Under a third of manufacturers (31%) reported that they had a formal plan together when they moved into exporting; 60% either just fell into it or got into it reactively when an overseas customer got in touch. If such a large number of manufacturers are experiencing the benefits of exporting on this kind of reactive basis, imagine what could be achieved if they had a comprehensive plan in place on how to best achieve growth. In light of these findings we’re suggesting manufacturers progress their thoughts around opening up new export markets sooner rather than later and take a more global outlook.”
Notes to Editors:
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