Manufacturing SMEs missing out on exports

One in five (20%) of SMEs in the manufacturing put overseas expansion in their top business priorities for the year and just under one in five (19%) said that they expect their growth to come from international sales over the next three years, thus making them heavily reliant on the fortunes of the UK economy. The findings, which are based on interviews conducted for GE Capital, with the owners and managers of 500 UK SMEs, show that the UK government's emphasis on an upturn that will be largely export-driven may be at odds with the expectations of small and medium sized enterprises in the manufacturing sector. Of those companies that do export, almost three-fifths (56%) continue to invoice their overseas customers in sterling rather in the foreign currency of their buyer. This is no change since 2008 when only 56% were doing so. As a result, these businesses could miss the opportunity to either increase volumes or indeed take advantage of the weak pound through higher profit margins. GE Capital CEO John Jenkins said: "Now that the long-awaited export-led recovery shows signs of at last arriving, the weakness of sterling against the Euro and the US dollar should provide excellent opportunities for UK firms to maximise their export potential. However, our study shows that fewer small and medium sized businesses are making the most of the export opportunities than two years ago, despite an incredibly favourable environment. Nonetheless, those that are planning to venture into overseas territories for the first time should seek professional advice on securing payment and managing exchange risk."