UK exporters are feeling the pinch, and there is no way of packaging this so that it is easy. The largest businesses appear to have been most severely affected. There are nearly 9% fewer of them compared to 3% fewer medium-sized businesses, almost 5% fewer small businesses and 6% fewer micro-businesses who were exporting in February compared to a year ago.
Large exporters were disproportionately affected. Their revenues fell by around 12.4% in January compared to a 0.3% drop in medium-sized businesses’ revenues. The need to diversify and redistribute supply chains to create less reliance on Europe has significantly impacted larger firms.
Small companies were also severely affected with a decline of over 16% in revenues, which directly impacts their budgets, but not broader operations. This is a direct consequence of disruptions to imports in the early part of 2022
After a start to 2022 that saw imports from Europe subject to the same customs declarations as exports, delays at ports and more supply chain disruptions were inevitable. The result is that exporters have suffered: there are 5% fewer exporters compared to 12 months ago, their employment has fallen back by nearly 5.5% and their revenues by almost 11% compared to a year ago.
The effects of a shift in how exporter numbers were calculated in February 2022 have now worked through the data, so the year-on-year comparisons are a good reflection of the impact that the changes have had on the export sector over the past 12 months.
Trade conditions for exporters remain tough across the UK nations, although Scotland appears to have fared better than the rest of the UK over the last month. We expect a mild uptick in March across all UK nations, but the more prolonged term effects of Brexit and supply chain shortages are working through. As we additionally start to see the impact of the Russia-Ukraine crisis, we can expect substantial downside risk to the more positive outlook over the next two months.
Coriolis Technologies Chief Executive, Dr Rebecca Harding said:
Institute of Export & International Trade director general, Mr. Marco Forgione said:
Despite the increase witnessed last month, all nations have seen a decline in the number of exporters during February. This brings the total number of exporters to 61,005, which is fewer than this time last year at 61,526, and the lowest the number has been since January 2021.
Figure 1: Counts of Exporters over time, February 2020-February 2022
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NOTE: The data for Scotland, Wales and Northern Ireland are given in the Appendix
Exporter employment since last month has generally followed this decline for England and Northern Ireland. There was a minor increase for Wales and a substantial increase for Scotland, climbing from 684,304 to 760,322 – 11% increase overall. Scotland’s exporter employment is higher than it was last year, but this is a different story for the UK in general with exporter employment numbers at 13,652,341, a 4.6% drop since last month and the lowest it has been since January 2021.
Figure 2: Exporter employment over time, February 2020-February 2022
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NOTE: The data for Scotland, Wales and Northern Ireland are presented in the appendix
The UK has seen a 9.3% decrease in the total revenue generated by exporting businesses over the last 12 months with a drop from £5.2bn to £4.7bn. In line with this, no nation performed better in February 2022 than February 2021. Northern Ireland experienced the biggest decrease of 13%, whereas Scotland was the most resilient with only a 4.9% drop.
Figure 3: Exporter revenues over time, February 2020-February 2022
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NOTE: The data for Scotland, Wales and Northern Ireland are presented in the appendix
The 12-month moving average number of exporters fell back in February 2022 by -5.09%. This compared to an increase of over 69%in the number of exporters in the 12 months to January 2021. However, the growth in the previous year was distorted by a re-calculation of the way in which UK tax authorities collected data about exporters from the UK to Europe. Exporters to Europe were included from February 2021 thus the jump between January and February is included in the data for 2021.
Figure 4: 12 month moving average change in exporter numbers (%)
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The number of employees in UK exporting businesses fell by 5.41% %. This compares to an increase in employment for the 12 months to February 2021 of 45.18%. Again the figures for the 12 months to February 2021 are distorted by the UK Customs and Excise changes in data collection.
Figure 5: 12 month moving average change in exporter employment (%)
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The amount of revenue generated by exporting businesses fell by 10.73%. in the 12 months to February 2022. In the 12 months to February 2021 revenues increased by 29.21% which is proportionately less than the increases in the counts and employment of UK exporting businesses. This suggests that the profitability of businesses of all sizes has been affected by the events of the last 2 years.
Figure 6: 12 month moving average change in exporter revenues (%)
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We expected this drop in the 12 month moving average, although it is slightly larger than the 4% we predicted in January. This suggests that the effects of import delays in January did impact exports in February. We are expecting a mild pick up in the numbers of exporters and revenues in March but for employment to continue to contract by over 6% accounted for by large businesses in particular
Figure A-1 : UK exporter counts by UK nation, February 2020-February 2022
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NOTE : data is presented for England on the left hand vertical axis, and for Scotland, Wales and Northern Ireland on the right hand axis for ease of trend comparison
Figure A-2 : UK exporter employment by UK nation, February 2020-February 2022
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NOTE : data is presented for England on the left hand vertical axis, and for Scotland, Wales and Northern Ireland on the right hand axis for ease of trend comparison
Figure A-3 UK exporter revenues by UK nation (£m), February 2020-February 2022
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NOTE : data is presented for England on the left hand vertical axis, and for Scotland, Wales and Northern Ireland on the right hand axis for ease of trend comparison
According to the latest UK Exporter Monitor by Coriolis Technologies and The Institute of Export & International Trade, Northern Ireland exporter numbers increased more than any UK nation in the past month
Is now the moment to call time on measuring ESG? The shortest and most polite answer to this question is a resolute ‘no’. We have no option but to transition away from where we are now to include the ESG that the investment community seems to reject.
Now is undoubtedly the moment where a strategic, and integrated approach to sustainability, economic development and growth, and, sadly, military conflict, needs to be developed by businesses, governments and financial institutions. Trade has a central role to play in this strategy.
