First Sign of Sanctions Biting Adds to Exporting Uncertainty: Monthly UK Exporter Monitor, April 2022

6 May 2022, Monthly UK Exporter Monitor, April 2022
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The Government reported a recovery in UK exports in February 2022 from December 2021, but this was short-lived according to the latest Exporter Monitor by Coriolis Technologies and The Institute of Export & International Trade (IOE&IT).

The data suggest that counts of exporters fell back in April 2022 by 3.1%, employees by nearly 6% and revenues by nearly 4% compared to March 2022. A total of 61,915 businesses exported in April 2022, with some 13,302,762 employees and £4,857,689,565 in turnover.

The outlook for the coming months looks difficult for UK exporters, especially given the current geopolitical situation. Our projections suggest that there could be a mild uptick during May, however, the June and July forecasts show that exporter counts will flat-line at best; at worst, any May growth will be short-lived.

During April, the numbers of small businesses exporting dropped the most steeply – by some 4.31%, while the drop in larger exporters was much smaller at 1.3%. However, in terms of revenues and employees, it is the larger businesses that are showing the greatest decline, of over 4% in revenues and over 6% in employment compared to a year earlier. This is particularly concerning because many smaller businesses rely on the supply chain effects of larger businesses, and if these are falling back, it presents a real challenge to UK originating export supply chains in the future.

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Coriolis Technologies Chief Executive, Dr Rebecca Harding said:

“As expected, the uptick in February exports was short-lived replicating the seasonal recovery we expect to see after January lows. However, the extra impact of sanctions following the Russia-Ukraine crisis has further driven down exporter counts, revenues, and employment in April 2022. The concern here is also the negative impact on large firms in terms of revenue and employment which subsequently creates a risk to supply chains and SMEs in particular in the coming months.”

 

Institute of Export & International Trade director general, Mr. Marco Forgione said:  

“The message is simple, don’t take UK exporters for granted, they rely on their international networks for their trade – and those networks are under severe strain. While the supply chain crisis continues, the Russian invasion of Ukraine adds uncertainty to an already complex trading picture. Relationships are fragile and UK exporters need help, support and guidance to get them through these difficult times. We reiterate our commitment to supporting businesses of all sizes through these turbulent times. Education is an essential tool to ensure UK exporters have the expertise to trade effectively, sustainability and competitively.”

Methodology:

  • Method:
    Coriolis Technologies has matched UK exporter data from Customs and Excise sources with Bill of Lading data and large-scale publicly available datasets. UK HMRC data covers the names and addresses of all UK exporters who send products through customs and excise. These names were matched to Bureau van Djik FAME data to establsh turnover and employment levels. To establish the numbers of service sector companies with export revenues, Coriolis took those businesses in the FAME database with international turnover to collect sector and employment as well as turnover information. The sector distribution of exporters in goods and services was then applied to the sample of companies which did not have turnover or employment data to scale the whole dataset to establish counts, turnover and employment for the UK as a whole. Companies were taken from an HMRC sample going back to 2017 and any duplicates with international turnover data from FAME data removed.
  • The forecasts are based on a statistical “General Additive” modelling framework which decomposes each time series (each exporter count group) into a couple of main components:
    • trend
    • seasonality – effect of calendar month or season
    • changepoints – moments where the trend shifts
    • special calendar events
  • These effects are smoothed, added together and extrapolated into the future to create forecasted values for each exporter group separately. The model is optimized to explain as much variability in the time series with as simple model as possible.
  • The estimated forecasting error is within 1.7% of the actual value, back-tested on the actual forecasting performance over the past 2 years for the aggregate forecasts and for the forecasts by size and UK nation

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