Confidence among UK small and medium-sized enterprises (SMEs) is on the up, but a lack of financing for exports appears to be an obstacle to international expansion, according to two separate reports. A survey published in late October by global financial services firm Western Union, based on interviews with more than 600 SME representatives engaged in international trade, said that 68% of respondents expressed confidence in the UK climate in the third quarter of 2013. This constitutes a 22% rise when compared with the same quarter in 2012, and a 12% increase on the second quarter of 2013.
Confidence among UK SMEs is at its highest level since Western Union started conducting surveys in March 2010. Confidence regarding the international trade climate, where 77% of respondents registered a positive outlook, is also at a record high, beating the previous record set in the fourth quarter of 2012.
The release of the Western Union survey coincided with a more cautionary report published jointly by UK business lobbying organisation the CBI and international accountancy network BDO. The 'Go Your Own Way' report stated that only 52% of the UK's medium-sized companies received direct assistance from UK Export Finance (UKEF), the country's national credit agency. According to the report's estimates, more widespread UKEF assistance could be worth an additional £20bn ($32.15bn) to the UK economy.
“Government support has improved, but the reality is that it has not even scratched the surface when it comes to supporting the efforts of British medium-sized businesses. UKEF must reach out to far more businesses on the ground,” said Katja Hall, the CBI's chief policy director, on the findings of the report.
The CBI/BDO research revealed that a large majority of medium-sized company executives in the UK have expressed an intention to increase their international presence. According to the report, 78% of respondents expect to generate more revenue from investment abroad. Yet despite the international ambitions of company executives, the CBI/BDO survey also revealed that 69% of respondents representing SMEs were not aware of the existence of UK Trade and Investment (UKTI), the main body charged with assisting UK companies in their overseas ventures.
“Both the UK government and the private sector must take an urgent look at how they can better deliver export finance to the growing companies that need it most, especially for new or smaller exporters,” said Ms Hall.