British goods exporters continued to ride on the crest of the wave of sterling’s devaluation in the second quarter, in spite of signs that the boom may peak in the coming months, new data have revealed.
Manufacturers reported the highest rate of increased export sales since the end of 2014, according to a survey of more than 3,500 exporters published today by the British Chambers of Commerce (BCC) and logistics firm DHL.
A positive balance of 27 per cent of manufacturing exporters reported an increase in export sales rather than a decrease, while the order pipeline remained firm, at a 20 per cent positive balance.
Meanwhile the volume of export trade documentation issued by Chambers of Commerce throughout the UK remained at its third-highest level on record, despite dipping by 2.25 per cent in the second quarter.
Yet exporters are still keeping a “watchful eye” on currency fluctuations, according to Adam Marshall, BCC director general. While exporters’ products are theoretically more attractive to foreign buyers when priced in devalued sterling, increasingly international supply chains mean a currency fall can be a double-edged sword for manufacturers.
He said: “Many manufacturers are capitalising on the advantages the fall in sterling has brought to overseas sellers since the EU referendum. That said, exporters also tend to import raw materials and product components, and are concerned that the sustained depreciation of the pound may erode their margins.”
Some 68 per cent of manufacturers cite the exchange rate as a key concern in the months ahead, with the potential for volatility as the UK negotiates the Brexit process.
Services firms, which are generally less sensitive to currency fluctuations, reported less positive effects from the devaluation, with a 13 per cent positive balance of firms reporting increased exports.