Exports by South West businesses have slumped to historic lows as they are hit by higher trade barriers due to Brexit, according to a major new survey.
Manufacturers have been impacted most, the research by the British Chambers of Commerce South West shows.
Some 53% of exporters said they had been impacted by the new UK-EU Trade and Co-operation Agreement (TCA), compared with 22% who reported no change.
Manufacturing firms that export said their international sales and orders had fallen to historic lows and remained strongly in negative territory – at minus 28% for orders and minus 22% for sales compared to previous surveys.
Just over 500 businesses took part in the latest survey – the largest in the region so far to gauge the impact of Brexit.
Exporters highlighted a number of significant ‘adjustment problems’ for their operations, including unclear government guidance and general business confusion, logistical difficulties, additional VAT obstacles, a breaking down of trust with customers and general worsening of trade conditions.
Common complaints included delays at the border, a lack of capacity within logistics firms and unfamiliarity with new paperwork.
Some 47% of exporters predict that trade with the EU will decrease, compared with just 3% who think it will increase and 32% expecting it to remain the same.
Challenging predictions of a post-Brexit UK-global trade boom made by some commentators, just 11% of exporters feel that the TCA would increase their sales in non-European export markets, with a further 9% of exporters saying that it would harm global exports.
British Chambers of Commerce South West chair Stuart Elford, pictured, said: “Our survey demonstrates the very substantial impact of Brexit on local exporting businesses. This backs up the official national data that our exports to Europe have had a major short-term shock.
“Apart from the first impact of the global pandemic seen in the second quarter of last year, our latest survey results on manufacturing exports sales and orders are the worst in the South West since the global financial crisis of 2009.
“Services exporters’ sales and orders have been under significant pressure throughout the pandemic but remain very weak when compared to our South West business surveys over the past 30 years.
“Some of it is hopefully short term – with firms being hit by both Covid and Brexit disruption. This has been exacerbated by the lack of any meaningful time to adapt to the new Brexit rules and the high level of disruption in export logistics and at Dover.
“However, many firms are reporting losing customers and trust among their European buyers, as extra costs and obstacles make it harder to compete in this market.
“Worryingly for the region, many more exporters think they will see a fall in European exports than is made up for an increase in exports to the rest of the world.”
As a result, businesses and government needed to work much harder to make ‘Global Britain’ became a reality, with more investment in helping firms break into alternative markets now vital, Mr Elford said.
“A common exporter complaint is also excessive or incorrect application of the new rules by European customs agents alongside frustration at lack of clarity from the UK government,” he added.
“We hope the UK government can use diplomacy to reduce the level of current frictions being applied in Europe. We can’t afford to let a bad start to the year cement itself into permanent damage to the UK.”
