Let's export ourselves out of this

May 28 2010 by Andrew Hebden, The Journal

North East businesses would be well advised to broaden their horizons as they seek the best route out of recession, says Andrew Hebden.

IF a recession is a time for hunkering down and focusing on the basics, then the period of recovery is perhaps a time for getting your head up and spotting new opportunities.

Certainly, there is much to be said for adopting a global perspective when it comes to seeking new markets as your business plots a growth plan out of the downturn.

And the importance of international trade is a key message that many business leaders have been keen to stress in the post-recession environment.

The North East has a mixed record when it comes to exporting. Whilst the region has long been proud for being the only part of the UK to have a positive balance of trade, the figures have been somewhat skewed by the contribution made by a small number of major players, in particular Nissan and Corus on Teesside. Take these two businesses out of the frame and you emerge with a picture of a region where the vast majority of small and medium-sized businesses have little or no experience of selling in overseas markets.

In many respects, this is quite peculiar. After all, the region played a formidable part in Britain’s role as the “workshop of the world”, something you might have expected to install a global perspective within our businesses. Moreover, you might think the presence of global players such as Nissan and Corus would inspire other smaller companies in their sectors to follow suit.

But, whilst there are many great examples of North East firms which do export their goods and services overseas – often with spectacularly successful results – there is also evidence that many firms have yet to appreciate the opportunities out there.

The recession proved a challenging time for many of those companies that might be expected to be our most prolific exporters – in particular manufacturers. But, despite them being hard hit, the total annual value of exported goods from the region during 2009 was 15% lower than the previous year but still stood at a not inconsiderable £10bn. Indeed, in the last quarter of the year, the region exported goods worth a total of £2.76bn – the fifth highest quarterly value ever recorded.

However, it emerged earlier this month that the UK’s trade gap actually grew to £7.5bn during March, disappointing hopes that an export-led recovery was getting under way. This has not been helped by the problems in Europe – the UK’s key trading region – caused by the crisis in Greece.

Jonathan Walker, policy adviser at the North East Chamber of Commerce (NECC), said: “We need to be back on track towards export-led growth as soon as possible. Businesses in the North East and across the UK urgently need short-term trade finance support so our exporters can get goods and services to the global market over the course of the recovery.”

David Coppock, international trade director for the region at UKTI, said it was the ideal time for businesses to examine the opportunities that overseas markets held for them.

“Our international trade performance is something of which we can be proud yet, for all our achievements in the global marketplace, the actual number of companies that export is still small,” he said.

“The North East has a strong industrial heritage and that is providing a renaissance in the economy and we are leading the way in some of the world’s fastest growing sectors – energy and low-carbon technology, chemicals, automotive, healthcare and life-sciences to name just a few.

“International trade is a key element of the region’s economic success and it’s been proven time and again that companies that export are more resilient.

“Our challenge is to ensure that businesses know that help is at hand to those wanting to navigate their way out of the recession by seeking out new business opportunities overseas,” he added.