The coronavirus has taken a toll on the UK’s international trade but the picture looks set to improve, according to new figures from an IoD survey of almost a thousand company directors.
Among those who export:
- Four in ten had seen an overall decline in exports, with a further 9% seeing a mixture of increases and decreases, meaning around half had seen some negative impact.
- The leading cause was a drop in overseas demand, followed by travel restrictions.
- However, the vast majority (76%) of those polled who have seen a decrease in exports said either that the situation has improved or they expect improvement as overseas lockdowns ease.
- A small majority (53%) hadn’t seen substantive change. However, over a quarter (27%) had seen imports decrease.
- By far the main reasons for a decrease in imports were temporary and/or lockdown-related.
- The top reason for importing among directors polled was lack of availability in the UK, and they were also twice as likely to bring goods in from the EU as Asia. Taken together the IoD said this underlined the need to avoid ‘knee-jerk reactions’ from policy-makers to restrict trade.
The data showing the consequences of travel restrictions for trade comes in the wake of concern over the impact of quarantine for business, with 86% of IoD members saying they expected it to have a negative effect on the UK’s economy. The Institute is calling on the government to continue seeking progress on travel corridors, and to use trade negotiations to help secure preferential mobility arrangements with other countries.
Allie Renison, Head of Europe and Trade Policy at the Institute of Directors, said:
“International trade has clearly not been spared from the effects of the pandemic. The widespread economic downturn, combined with multiple lockdowns and restrictions on movement, has put a strain on global supply chains. However, there does appear to be some light on the horizon, as companies regroup and adapt at speed.
“The important role travel plays in doing business makes clear the need for continued progress on travel corridors. More broadly, mobility arrangements should be on the UK’s list of priorities when it comes to trade talks with Europe and elsewhere. It goes without saying that securing a deal with the EU is paramount to avoid further disruption at a difficult time.
“Imports play a crucial role in supply chains across the UK. The fact that many firms import due to simple lack of availability at home underlines the risks that come with restricting inbound trade, however noble the intentions are.”