Ahead of the UK’s first trade data publication since the end of the Brexit transition period, IoD research has found nearly 20% of business leaders who trade with the EU stopped doing so in January.
With the Office for National Statistics due to publish figures for the first month of 2021, a survey of over 900 directors saw just under 1 in 5 of those trading with the EU report their commercial organisations had halted doing so during this period.
This cohort was narrowly split between those who indicated they had stopped trading temporarily and those who reported it to be a permanent cessation. Directors selling both goods and services were most likely to have halted EU trading overall, with those selling services being more likely to do so for good relative to goods-only traders. Similarly, those in financial services were far more likely to be permanently stopping EU trade, and few reporting this in manufacturing (with more doing so temporarily).
Businesses are also clearly focused on the more immediate challenges still posed by the impact of the end of transition; at 62%, nearly three times as many report seeing no opportunities out of Brexit as those who do (23%). However a notable minority also indicate uncertainty over this in the Don’t Know category (15%), reflecting the degree to which the UK is still early on in the adjustment phase.
Finally, among the 77% of IoD members who trade internationally in some form, just over a quarter indicate they have actively increased or plan to pursue more opportunities with non-EU markets in light of Brexit. A third report their were doing this anyway regardless of the UK’s exit, while 40% say Brexit will have no bearing on their wider trade engagement. As illustrated in the tables below, these numbers have stayed fairly steady across the past several years.
Commenting on the findings, IoD Head of Policy Roger Barker said,
“This should serve as a call to action for government. While still a minority, the hit to trade with our largest and nearest market needs to be addressed to ensure it does not become a permanent dent in our global ambitions.
“While it has recently taken remedial steps to help businesses adjust to life after Brexit, notably through the SME advice grants and internationalisation fund long called for by the IoD, engagement with the EU to smooth and enhance our new trading arrangements is urgently needed. Now that the UK is independently sovereign, proactive cooperation on an equal footing must be the priority.
“Business wants to see a twin-track approach to stabilising and repairing our trade with the EU, while robustly pursuing new deals with other countries that will unlock new markets and cut costs to trading with old friends. To help industry recover and build back better, going global must look both near and far when it comes to the needs of our economy.”