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is export growth a way out of the downturn?

Many members will have seen reports in the media earlier this year of the government and government agencies exhorting commerce to ‘export their way out of a recession’, but just how realistic is this option?

For most of the UK it seems that this is not proving to be at all realistic. At a meeting with other Chambers of Commerce recently, AGCC International Business Director, Jon Woodwards, found that the level of export documentation being issued by chambers (as good a measure as any of export activity) was down all over the UK with one exception – Aberdeen and Grampian. If our own export documentation levels are an accurate guide to export activity in the North of Scotland then record levels of certificates issued over the first half of the year attest to the global nature of the oil and gas sector and the increasing success of NE enterprises making the most of their export opportunities.

One surprising fact is that the proportion of the export activity which is oil and gas related is limited. Fisheries, farming and whisky are other strong exports from our region. We are seeing higher levels of exports of a wide cross section of commodities from the region to the rest of the world. Research referred to below from the British Chambers of Commerce for the NE shows that the breakdown by sector is: 28% business services; 22% manufacturing/engineering; 8% construction; 8% other; followed by a mix of other sectors including utilities, education, healthcare, transport and marketing services.

Furthermore, recent research conducted by the British Chambers of Commerce gives some valuable insights into the key characteristics of our successful export approach. These are the results for businesses in Aberdeen and Grampian. The full report can be downloaded from the BCC site on www.bcc.co.uk

• Just over half (51%) of the 62 businesses surveyed in Aberdeen and Grampian already exported (the figure for Glasgow is 25%).
• Those which did not export gave the following reasons: 56% did not see exporting as part of their business plan or felt that they did not have a suitable product or service; 21% felt they had sufficient business in the UK; 8% had limited knowledge which constrained them; 6% concerns over paperwork; and 4% had difficulty finding agents or distributors.
• The services that would help them to overcome these barriers to market entry overseas were identified as: 21% one-stop shop support; 20% training; 16% access to grants; 16% help finding clients; and 11% access to trade finance. (Your own AGCC offers most of these services to members to a standard that most chambers of commerce cannot achieve – so we hope that we play a small part in the export excellence of the region.)
• The motives for exporting as part of the business mix are instructive: 65% export because they were approached by a customer; 63% see return on investment as the reason; 61% have established market connections; 59% are there to build market share; 28% to utilise spare capacity.
• The main markets for exports are Asia at 59% of respondents; Europe at 86%; the Americas at 60% and Australia/New Zealand at 34%.
• Problems with bureaucracy in European markets were cited as a problem by 71% of respondents – the single biggest barrier to exporting to Europe.

So, three cheers for the city and shire for great export performance. If you’re not part of this success story, maybe a good place to start is by calling Jon and his team on 01224 343900.

Export growth may be part of your way out of the downturn.