UK businesses are optimistic about their future exports despite grappling with trade disruption caused by Brexit, a new report out today reveals.
Some 42 per cent of firms expect their exports to grow over the next year, according to a survey by business lobby group the Institute of Directors (IoD).
A series of free trade agreements (FTA) inked this year has boosted companies’ trade confidence.
The government has sealed deals with Australia and New Zealand, and agreements with India and Canada are nearing the finish line.
Britain however has yet to establish a deal with the United States, seen as key to strengthening the country’s trade position following the EU withdrawal.
After Brexit, “businesses have been looking beyond the EU and finding opportunities as a result of FTA negotiations,” the IoD said.
A weaker pound may also lift UK exports by making the country’s products more competitive. However, the global economy is slowing, meaning a reduction in export demand could wipe off any gains absorbed by UK firms from a weaker currency.
“New markets are being opened up as the government signs trade deals across the globe, and the digitisation of trade processes will help to reduce friction at the border,” Emma Rowland, policy advisor at the IoD, said.
However, Brexit has railroaded nearly half of companies export activity, the report found.
Higher costs and stricter custom controls have resulted in 42 per cent of IoD members’ trade with EU countries falling.
Cooling tensions between Brussels and London would remove trade friction among the UK’s exporters, the IoD said.