The number of UK firms reporting an increase in export orders and confidence rose at the start of 2016, following a drop in growth at the end of 2015, the latest Quarterly International Trade Outlook (QITO) from the British Chambers of Commerce (BCC) and DHL has shown.

The report’s Trade Confidence Index, measuring the volume of trade documentation issued by accredited Chambers of Commerce, rose by 1.4% in Q1 2016, compared with the previous quarter, to stand at an index of 116.04 in Q1 2016. However, in annual terms there was a decline of 4.4% on Q1 2015.

During the same period, ONS data and the BCC’s Quarterly Economic Survey have shown that economic growth softened across the UK.

There were clear sectoral differences in Q1 2016. Among manufacturing exporters, the balance of firms reporting improvements in export sales over the first three months of the year rose from +1% in Q4 to +8%. This increase came after a six-year low in Q4 2015. The balance of manufacturers reporting improved export orders also rose from +1% to +8%.

Export sales growth dipped in the services sector, where the balance of service firms reporting improved export sales fell two points to +13%. However, export orders rose to +16% from +9%.

Across the regions and nations of the UK, there was a mixed picture. Despite showing growth throughout 2015, the volume of trade documentation issued in Scotland dropped to its lowest since Q3 2009, while the North East and Northern Ireland both reached record highs for their areas. These figures provide a strong proxy for levels of goods exports to non-EU markets.

The key findings from the report are:

  • The Trade Confidence Index, a measure of the volume of trade documentation issued nationally, rose by 1.4% on Q4 2015, but fell by 4.4% on Q1 2015 – the index now stands at 116.04
  • The largest quarter-on-quarter increases in export document volumes were in the West Midlands (7.4%), South West (6.9%), and the North West (6.5%)
  • The biggest declines in export document volumes were in Scotland (-13.6%), Yorkshire & Humber (-4.4%), and the East of England (-3.5%)
  • BCC data shows that the balance of manufacturers reporting improved export sales rose to +8% in Q1 2016 from +1% the previous quarter, and export orders growth rose to +8% in Q1 2016 from +1% in Q4 2015
  • The balance of services firms reporting improved export sales over the past three months fell to +13% in Q1 2016 from +15% in Q4 2015, and export orders growth rose to +16% in Q1 2016 from +9% in Q4 2015

Dr Adam Marshall, Acting Director General of the British Chambers of Commerce, said:

“Our latest analysis suggests that, despite efforts from businesses and government alike, we are not yet succeeding in transforming the UK’s export performance.

“There are a number of headwinds affecting our exporters, including a slowing global economy and major structural issues at home. Britain’s politicians need to focus on fixing the fundamentals of infrastructure, training and access to finance if we are to help UK firms to become more productive and competitive on the global stage.

“Although we saw a gentle rise in confidence and export orders this quarter, these improvements were from a low base. Manufacturers in particular have seen a long period of slowing export growth. Businesses and government will need to work together to nurture stronger export performance – a job that will take a decade or more to see through to fruition.”

Phil Couchman, CEO, DHL Express UK, said:

“Export performance continues to fluctuate across the different regions of the UK – making it an unpredictable time for businesses. With the EU referendum just around the corner, this is something that will be on the minds of exporters and also of those thinking about taking that first step in their export journey.

“However, businesses shouldn’t be put off by this uncertainty. Exporters and potential exporters should be reminded that there are plenty of support systems for businesses to lean on such as DHL, the BCC and many other expert organisations.”