Small and medium-sized companies are struggling to rebuild export trade after Brexit and the pandemic, with overseas sales failing to match a recovery in their domestic performance, an employers group has said.

The British Chambers of Commerce said there had been a “noticeable divergence between domestic trade performance and exports” and that small exporters “have been disproportionately impacted” by headwinds in global trade caused by the CV19 crisis and new trade barriers with the EU.

The group’s trade survey of 2,000 SMEs found that the proportion who saw UK trade increase in the final quarter of 2022 stood at a third, while only one in four saw an improvement in export performance.

The proportion of businesses reporting decreased overseas sales began to rise in the run-up to Brexit and has remained stubbornly higher ever since, the British Chambers of Commerce (BCC) said.

William Bain, Head of Trade Policy at the BCC, said:   “The global outlook was already looking fragile for 2024, but with increasing disruption to Red Sea shipping routes and continued geo-political uncertainty, it appears even more brittle.

“The reality is if we want to remain one of the world’s largest economies, then we need to get more firms selling goods and services internationally.  

“This is not easily done in the aftermath of a pandemic, supply chain disruption, Brexit, increased non-tariff trade barriers and further global headwinds.

“But the UK’s brand remains strong, so we must lean more heavily into the advantages we possess. We are already a world-leader when it comes to digital trade, and we must make more of the opportunities that provides.  

“The UK has great strengths in our exports – services (including professional, business and travel services), renewable energy, green finance, engineering, advanced manufacturing, pharmaceuticals, automotive, food and drink, and R&D.   

“Business needs to work with Government to put in place a framework that makes use of all the advantages the UK has, to keep us at the top table, and to access incentives for our exports overseas. 

“Finally, we need to look again at ways of improving trade with the EU. It is still our biggest trading partner, but firms continue to express huge frustration with the complexity and costs involved – which go way beyond what they face elsewhere.” 

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