Safer trading for Bristol exporters #1
1
Bristol businesses are regularly being encouraged to be ambitious and reach out beyond the UK but can you mitigate the risks? Coface UK’s Risk Underwriting Director, Grant Williams explains why it’s a good idea to seek expert help. With inflation at a record low and UK economic growth continuing to surpass our competitors, this should be a great time to invest for the long-term. And one of the surest ways to achieve sustainable success is to market your goods and services overseas. There are considerable rewards for thinking big as successful exporters achieve faster growth than companies that focus entirely on domestic sales. What’s more, doing business in new environments can stimulate creativity and innovation: for example, a 2011 study found that 42% of firms invested more time and money in new product development as a result of selling overseas and 41% said selling overseas had increased the money available for investment in new product development 1 . Sadly, many SMEs are daunted by the risks and are missing out on these opportunities. A survey of more than a thousand UK SMEs, found that more than a third of small businesses and a fifth of mid-sized businesses had no interest in exploring overseas markets 2 . Advice and support SMEs who want to export do not have to go it alone. Help is available from the Government’s UK Trade & Investment Department (UKTI), local Chambers of Commerce and trade organisations such as the British Exporters Association (BExA) and The Institute of Export (IOE). In addition, SMEs with concerns about bad debt and late payment risk can work with an established specialist in overseas trading risk to research potential markets. As a worldwide leader in domestic and export credit insurance, Coface has been supporting international trade since 1946. One of our services as a leading insurer is to publish economic reports and country risk assessments which provide an insight into the average payment incident level presented by companies in 160 countries. There are seven grades from A1 to D and each can be positively or negatively watchlisted. Coface’s country risk assessments are freely available at www.cofaceuk.com/economic-studies. To give you a flavour, here is a brief overview of the top five export destinations 3 for businesses in the South West: Germany (rated A1) Coface recently upgraded its assessment of Europe’s largest economy because of improving economic growth. The German business climate is good and payment incidents are low but there are concerns about aging infrastructures which may hinder future productivity and the ongoing political tensions with Russia over Ukraine. France (rated A3) There has been some improvement in companies’ financial health and the Government is trying to implement structural reforms to increase competiveness. However deflationary pressures have dampened appetite for investment and a large proportion of household revenue is being used for debt repayment which is also limiting demand. Payment incidents are currently higher than the world average but the trend is downwards. USA (rated A1) Growth is being driven by robust domestic demand and an industrial renaissance, particularly in the automotive sector but also chemicals, textiles and transport. Companies have been able to take advantage of a reduction in energy costs, linked to the expansion of shale gas and the fall in oil prices, but also limited wage rises. Reported payment incidents remain higher than the world average. Netherlands (rated A3, positive watchlisted since October 2014) Moderate growth driven by exports and investment (which have compensated for stagnant consumption). Business confidence is improving, especially in the transport, manufacturing and construction sectors. Business bankruptcies fell by 21% over the first ten months of 2014 and recorded payment incidents are on a downward trend. Irish Republic (rated A3) Ireland experienced accelerating growth in 2014, driven by improving exports, increasing household consumption and growing confidence. These factors should sustain growth in 2015 and payment incidents are below the world average. However, public debt remains high and support for the ruling coalition has weakened which is creating uncertainty. Each year, Coface UK holds a Country Risk Conference to help businesses understand global economic trends and assess trading conditions in established and emerging markets. If you want to be better informed about overseas trading risk, Coface’s Country Risk Conference takes place in London on Thursday 4th June. To register your interest please email [email protected] References 1 Page 6, Bringing home the benefits: How to grow through exporting, UKTI, November 2013 https://www.gov.uk/government/uploads/system/uploads/attachment_data /file/294348/Bringing_home_the_benefits_- _how_to_grow_through_exporting.pdf 2 Export Week: 36% of UK small businesses shun overseas expansion, KPMG, 10 November 2014 http://www.kpmg.com/uk/en/issuesandinsights/articlespublications/newsre leases/pages/export-week-36-of-uk-small-businesses-shun-overseas- expansion.aspx 3 Regional Trade Statistics Third Quarter 2014, HMRC, 4 December 2014. https://www.uktradeinfo.com/Statistics/RTS/Pages/default.aspx Safer trading for Bristol exporters
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Bristol businesses are regulary being encouraged to be ambitious and reach out beyond the UK but can you mitigate the risks? Coface UK's Risk Underwriting Director, Grant Williams explains why it's a good idea to seek expert help.
Transcript of Safer trading for Bristol exporters #1
Bristol businesses are regularly being encouraged to beambitious and reach out beyond the UK but can you mitigatethe risks? Coface UK’s Risk Underwriting Director, GrantWilliams explains why it’s a good idea to seek expert help.
With inflation at a record low and UK economic growthcontinuing to surpass our competitors, this should be a greattime to invest for the long-term. And one of the surest ways toachieve sustainable success is to market your goods andservices overseas.
There are considerable rewards for thinking big as successfulexporters achieve faster growth than companies that focusentirely on domestic sales. What’s more, doing business in newenvironments can stimulate creativity and innovation: forexample, a 2011 study found that 42% of firms invested moretime and money in new product development as a result ofselling overseas and 41% said selling overseas had increased themoney available for investment in new product development1.
Sadly, many SMEs are daunted by the risks and are missing outon these opportunities. A survey of more than a thousand UKSMEs, found that more than a third of small businesses and afifth of mid-sized businesses had no interest in exploringoverseas markets2.
Advice and supportSMEs who want to export do not have to go it alone. Help isavailable from the Government’s UK Trade & InvestmentDepartment (UKTI), local Chambers of Commerce and tradeorganisations such as the British Exporters Association (BExA)and The Institute of Export (IOE).
In addition, SMEs with concerns about bad debt and latepayment risk can work with an established specialist inoverseas trading risk to research potential markets.
As a worldwide leader in domestic and export credit insurance,Coface has been supporting international trade since 1946.One of our services as a leading insurer is to publish economicreports and country risk assessments which provide an insightinto the average payment incident level presented bycompanies in 160 countries. There are seven grades from A1 toD and each can be positively or negatively watchlisted.
Coface’s country risk assessments are freely available atwww.cofaceuk.com/economic-studies. To give you a flavour,here is a brief overview of the top five export destinations3 forbusinesses in the South West:
Germany (rated A1)Coface recently upgraded its assessment of Europe’s largesteconomy because of improving economic growth. The Germanbusiness climate is good and payment incidents are low butthere are concerns about aging infrastructures which mayhinder future productivity and the ongoing political tensions withRussia over Ukraine.
France (rated A3)There has been some improvement in companies’ financial healthand the Government is trying to implement structural reforms toincrease competiveness. However deflationary pressures havedampened appetite for investment and a large proportion ofhousehold revenue is being used for debt repayment which isalso limiting demand. Payment incidents are currently higher thanthe world average but the trend is downwards.
USA (rated A1)Growth is being driven by robust domestic demand and anindustrial renaissance, particularly in the automotive sector butalso chemicals, textiles and transport. Companies have beenable to take advantage of a reduction in energy costs, linked tothe expansion of shale gas and the fall in oil prices, but alsolimited wage rises. Reported payment incidents remain higherthan the world average.
Netherlands (rated A3, positivewatchlisted since October 2014)Moderate growth driven by exports and investment (which havecompensated for stagnant consumption). Business confidenceis improving, especially in the transport, manufacturing andconstruction sectors. Business bankruptcies fell by 21% overthe first ten months of 2014 and recorded payment incidentsare on a downward trend.
Irish Republic (rated A3)Ireland experienced accelerating growth in 2014, driven byimproving exports, increasing household consumption andgrowing confidence. These factors should sustain growth in2015 and payment incidents are below the world average.However, public debt remains high and support for the rulingcoalition has weakened which is creating uncertainty.
Each year, Coface UK holds a Country Risk Conference to helpbusinesses understand global economic trends and assess tradingconditions in established and emerging markets. If you want to bebetter informed about overseas trading risk, Coface’s Country Risk
Conference takes place in London on Thursday 4th June. Toregister your interest please email [email protected]
References1 Page 6, Bringing home the benefits: How to grow through exporting,
UKTI, November 2013
https://www.gov.uk/government/uploads/system/uploads/attachment_data
/file/294348/Bringing_home_the_benefits_-
_how_to_grow_through_exporting.pdf
2 Export Week: 36% of UK small businesses shun overseas expansion,
KPMG, 10 November 2014
http://www.kpmg.com/uk/en/issuesandinsights/articlespublications/newsre
leases/pages/export-week-36-of-uk-small-businesses-shun-overseas-
expansion.aspx
3 Regional Trade Statistics Third Quarter 2014, HMRC, 4 December 2014.
https://www.uktradeinfo.com/Statistics/RTS/Pages/default.aspx
Safer trading for Bristol exporters
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