Western Union Business Solutions International Trade Monitor Q3 2013
International Trade Monitor OCTOBER 2013 Powered by TNS Research
British SME confidence reaches new highs • • • •
Confidence in the UK economy hits 68%, the highest number on record Confidence amongst SME manufacturers outpaces that within the retail sector Concerns about the Eurozone and Government austerity measures fall Trade with emerging market falls slightly; expectations of increased trade with Europe rise • Credit outlook eases Confidence in British economic conditions hits all time high • Over two thirds of British SMEs engaged in international trade (68%) have confidence in the UK economic climate. This figure represents a significant increase of 12% over Q2 and a jump of 22% over Q3 2012 and is the highest number since records began in March 2010. • The percentage of SMEs that have seen improvement in the domestic economy has grown to 41%. This number was the biggest increase ever seen and compares to 20% in the previous quarter and a mere 7% at this time a year ago. • Similar to last quarter, the vast majority of SMEs that feel the economy has improved are confident the improvement is sustainable (87%). • 50% of SMEs feel the general business environment in the UK will improve, up from 37% in Q2 and 29% in Q1 2013 (the first quarter this question was asked).
Improvement in domestic confidence outstrips that in global trade conditions • Optimism about international trade conditions has also hit a new high, with 77% of SMEs expressing confidence in them, beating the previous record of 68% set in Q4 2012. • Only 30% of SMEs say that the international trade aspect of their business has been adversely affected by the UK economic climate. This number is consistent with past quarters, which have ranged from 30-36%. • Confidence both in an export-led recovery and an expected increase in international trade activity in the next 6-12 months remain relatively steady at 38% and 64%, respectively, compared to 33% and 59% last quarter.
KERRY AGIASOTIS Chief Commercial Officer Western Union Business Solutions, said: “Small and medium-sized businesses are embracing improved economic conditions. In Q2, larger companies were expressing optimism, but this has been slower to trickle down to SMEs. What we are seeing now is the first significant rise in SME confidence as domestic economic data grows stronger. It is particularly encouraging to see that Britain’s SME manufacturers are finally expressing more confidence, but retailers continue to feel the pain of reduced individual and family budgets. SME sentiment indicates that we are in the midst of a real recovery but its sustainability is still being questioned. The green shoots we are seeing could easily be crushed by a seismic event, such as a renewal of the sovereign debt crisis in Europe. It is too soon to be complacent.”
Manufacturing SMEs lead the charge in improved outlook • Nearly three quarters of SME manufacturers expressed confidence in the UK economy (72%), compared to 64% of retailers. • Retailers are also more concerned about domestic conditions having a negative impact on international activity, with 39% saying their global trade has been adversely affected by the UK economy compared to only 24% of manufacturers. • Nearly one in five SME retailers (19%) think the UK economy has worsened over the last six months, compared to only one in ten manufacturers, whilst 42% of manufacturing SMEs believe there will be an export-led recovery in the UK, compared to 29% of those in the retail sector. Eurozone concerns fall by nearly 50% compared to 2012 • Only 34% of SMEs expressed anxiety about Eurozone instability, compared to 58% last quarter and 61% in Q3 2012. • Worries about Government austerity measures have also fallen from 42% last quarter to 34% (flat on Q3 2012), whilst confidence in the Government’s policies on international trade remain steady at 46% (compared to 42% last quarter and 38% year on year). • The overall health of the global economy, however, remains the overriding concern amongst SMEs, with 72% naming it as a worry (compared to 76% last quarter).
MEDIA ENQUIRIES: Jennifer Berlin Tel: +44 (0) 207 426 4457 [email protected] Lauren Franze/George Parrett: Tel: 020 7382 4747 [email protected]
International Trade Monitor OCTOBER 2013 Powered by TNS Research
Emerging market volatility impacts trade levels Modest shift in SME trade with emerging markets balanced by uptick in European expectations The overall increase in exports seen since Q4 2012 has largely remained intact with SMEs that have customers in major markets including China, Russia, North America and Brazil remaining in line with the previous three quarters. SME exporters with
KERRY AGIASOTIS CONTINUED: “UK SMEs are once more looking to their traditional trade partners in Europe for growth, an encouraging sign that the emerging confidence is not limited to the UK economy.
customers in India, however, have fallen for the first time in a year, from 15% to 11%,
We have seen an increase in SMEs
corresponding with a steep decline in the value of the Indian rupee. Exports to Africa
seeking customers abroad over the past
and Australasia also fell, from 21% and 23% to 14% and 16%, respectively.
year and it is positive to note that 40
Import activity has also seen a slight change, with UK SMEs buying from India falling from 15% to 10%, and from other Asian markets from 22% to 17%. Imports from other markets remain relatively steady quarter on quarter.
per cent of the companies we surveyed expect to grow their trade with emerging markets. Market volatility and reverse capital flows, however, can have an
Whilst the overall figures for trade with Europe remain steady, 35% of SMEs
impact on their international prospects,
surveyed expect to see their trade with the Eurozone increase in the next six month,
which was clearly demonstrated this
a 10% increase quarter on quarter. Only 5% expect trade with Europe to decrease,
quarter by the dip in trade with India.
the lowest number on record. 40% of SMEs expect to see their trade volumes with emerging markets increase (flat on last quarter) whilst a mere 1% expect to see them decrease.
The prospect of rising interest rates and policy changes will continue to influence emerging economies in 2014. Increased
Concerns about credit ease; currency volatility, customer loss and cash flow
SME exposure to global markets means
worries persist
there is an increased need for them to
One quarter of SMEs surveyed expressed concerns about credit availability,
take steps now in order to protect their
representing a 10% fall from Q2, whilst one third of SMEs (32%) think credit is
margins and improve their cash flow in
easier to obtain now then it was a year ago (up a corresponding 10% from Q2). 23%
the long term.”
of companies surveyed tried to obtain credit, down from 29% in Q2, but of these, 80% were successful in obtaining it. Only 12% of businesses indicated that the likelihood of their requesting lines of credit had increased, whilst 15% of companies are considering alternative sources of finance (flat on Q2), with asset based financing, personal savings, factoring accounts receivables and peer-to-peer lending being the most popular vehicles being explored. Finally, half of SMEs surveyed are worried about currency volatility, customer loss and cash flow (53%, 51% and 47% respectively, compared to 59%, 54% and 50% last quarter).
MEDIA ENQUIRIES: Jennifer Berlin Tel: +44 (0) 207 426 4457 [email protected] Lauren Franze/George Parrett: Tel: 020 7382 4747 [email protected]
International International Trade Trade Monitor Monitor APRIL 20132013 Powered by TNS Research OCTOBER Powered by TNS Research
Western Union Business Solutions International Trade Monitor (ITM) The International Trade Monitor is the only piece of research available that
SUB-MONITORS The Western Union Business Solutions International Trade Monitor measures the overall confidence of the UK’s importers and exporters by tracking their views across three sub-monitors: the Current Situation Monitor, the Global Outlook Monitor and the Expectations Monitor.
tracks the confidence and sentiment of Britain’s SME importers and exporters and has been running since March 2010 as the Travelex Confidence Index. The research is now conducted on behalf of Western Union Business Solutions, a unit of the Western Union Company (NYSE: WU).
Overall Confidence 125 120 115 110 105 100 95 90 Jul-13 Aug-13 Sep-13
May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13
85
Current Situation Monitor 115 110 105 100 95 90 Jul-13 Aug-13 Sep-13
May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13
85
Global Outlook Monitor 130
THE CURRENT SITUATION MONITOR The Current Situation Monitor measures importers’ and exporters’ views on current economic conditions and availability of business credit. The monitor rose from 104 in May to 122 in September, the highest number ever recorded. Economic indicators throughout the third quarter continued to point towards higher growth levels with a recent report by the British Chamber of Commerce suggesting that growth over the third quarter could reach levels not seen since 2007. Whilst credit conditions remain weak, positive news about the Government’s extension of its flagship Funding for Lending Scheme made headlines and the scheme itself helped spearhead an increase in net lending in Q2. This improvement sparked hopes that an eventual recovery in the UK’s credit market is on its way. THE GLOBAL OUTLOOK MONITOR The Global Outlook Monitor measures importers’ and exporters’ views on trading conditions. This index reached a record high of 132, beating the previous high of 113 seen in November 2010. Confidence rose over the course of the third quarter on a global basis. The re-election of German Chancellor Angela Merkel steadied markets and helped the outlook for the Eurozone, which remains the UK’s largest trading partner. The US government may have gone into shut down in the fourth quarter, but prior to the lockdown, prospects for the US economy continued to reveal a modest growth outlook that almost brought about a cut or taper to the Federal Reserve’s quantitative easing programme. Economic data from Japan and China also continued to show signs of growth as fears over a hard landing scenario in China faded and Japan’s Abenomics filtered into positive economic data.
125 120 115 110 105 100 95 90
Jul-13 Aug-13 Sep-13
May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13
85
Expectations Monitor 115 110 105 100 95 90 Jul-13 Aug-13 Sep-13
May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13
85
THE EXPECTATIONS MONITOR The Expectations Monitor measures importers’ and exporters’ views on whether international trade conditions will improve over the next 6-12 months, and whether their business will see growth in its international activity. This monitor also reached a record high of 107 in September, matching the figure last seen in May 2011. During the course of the third quarter Sterling rose to 8-month highs against the US dollar and euro, which supported sentiment for importers. The strengthening pound will hold down their costs and also allow the Bank of England some time to realize its forward guidance policy. New Governor Mark Carney started his tenure there by stating that loose monetary conditions will remain in place until the rate of unemployment reaches 7%. British exporters, meanwhile, were boosted by the generally upbeat outlook for global growth as key sentiment indicators rose; the business climate in Europe continued to improve, whilst in Germany in particular new business showed its largest monthly gain in September in two years.
International International Trade Trade Monitor Monitor APRIL 20132013 Powered by TNS Research OCTOBER Powered by TNS Research
Demographics Overseas Suppliers Russia
Business location South East
2
19
London India
10
West Midlands
China
30
Australasia Brazil
6 2 5
Other South America
5
North America
25
Europe
East Midlands
8 7
Other
5
Scotland
5
Yorkshire
5 4
North East
3 2
Industry sector
11 14
Australasia
44
Wholesale Trade /Retail Trade
10
China
16 7 14
24
Business Services (Not Banking)
4
Construction
3
Transport/Storage
3
Fuel, Utilities & Mining
2
Other
20
10
North America
Source: Q2. Does your business… Q17. Which of the following industry sectors best describes the main business of your company?
33
Europe
74
Other Asia Other
8
Manufacturing
India
Other South America
North West
Source: Q16. In which of the following regions is your business located? (If more than one of the regions listed, please give head office location)
5
Overseas Customers
Africa
8
Wales
17
Source: Q18. In which of the following locations are the majority of your overseas suppliers based?
Brazil
South West
Northern Ireland 74
Other Asia
Russia
9
East England
Africa
Other
17
25 14
Source: Q18b. In which of the following locations are the majority of your overseas customers based?
MEDIA ENQUIRIES: Jennifer Berlin Tel: +44 (0) 207 426 4457 [email protected] Lauren Franze/George Parrett: Tel: 020 7382 4747 [email protected]
International Trade Monitor OCTOBER 2013 Powered by TNS Research
Our biggest challenge is getting credit and bank loans. Importer and Exporter, Wholesale/Retail Trade
I’m worried about competition from Asian contractors. Exporter, Construction
MEDIA ENQUIRIES: Jennifer Berlin Tel: +44 (0) 207 426 4457 [email protected] Lauren Franze/George Parrett: Tel: 020 7382 4747 [email protected]
There seems to be a cash flow slowdown within the industry we work in. It’s taking longer to get payments out of customers. Importer and Exporter, Transport/Storage
For me the big concern is confidence in the market place to spend money. Our biggest sector is retail and retail is struggling. Importer and Exporter, Manufacturing
The business is there but cash flow has become rather a problem to us and the banks aren’t sympathetic. Importer, Wholesale/Retail Trade
My biggest concern is cash flow. It would make life easier if cash flow was more forthcoming. Importer and Exporter, Business Services (not banking)
I guess [my biggest worry is] getting into new markets and expansions. Importer and Exporter, Manufacturing
The biggest challenge is exchange rates. We buy in and sell in [multiple] currencies so there is a risk. Importer and Exporter, Wholesale/Retail Trade
I think the idea is to grow the business and expand; to improve cash flow and reduce any risk. Importer and Exporter, Manufacturing
We need a stronger pound. If the pound is weaker we are paying more for the merchandise, which makes us less competitive. Importer, Wholesale/Retail Trade
© 2013 Western Union Holdings, Inc. All rights reserved. Western Union Business Solutions is a division of The Western Union Company. Services in the UK are provided by Custom House Financial (UK) Limited (which does business under the trade name of Western Union Business Solutions) or Western Union Business Solutions (UK) Limited (collectively referred to as “WUBS” or “Western Union Business Solutions”). Custom House Financial (UK) Limited (registered in England, Company Number 04380026, Registered Office Address: 2nd Floor, 12 Appold Street, London EC2A 2AW) is authorised by the Financial Conduct Authority under the Payment Services Regulations 2009 (Register Reference: 517165) for the provision of payment services and is registered as an MSB with HM Revenue & Customs (Registered No: 12140130). Western Union Business Solutions (UK) Limited (registered in England, Company Number 02854737, Registered Office Address: 65 Kingsway, London, WC2B 6TD) is authorised by the Financial Conduct Authority under the Payment Services Regulations 2009 (Register Reference: 536611) for the provision of payment services and is registered as an MSB with HM Revenue & Customs (Registered No: 12122416). This brochure has been prepared solely for informational purposes and does not in any way create any binding obligations on either party. Relations between you and WUBS shall be governed by the applicable terms and conditions. No representations, warranties or conditions of any kind, express or implied, are made in this brochure.
British SME confidence reaches new highs • • • •
Confidence in the UK economy hits 68%, the highest number on record Confidence amongst SME manufacturers outpaces that within the retail sector Concerns about the Eurozone and Government austerity measures fall Trade with emerging market falls slightly; expectations of increased trade with Europe rise • Credit outlook eases Confidence in British economic conditions hits all time high • Over two thirds of British SMEs engaged in international trade (68%) have confidence in the UK economic climate. This figure represents a significant increase of 12% over Q2 and a jump of 22% over Q3 2012 and is the highest number since records began in March 2010. • The percentage of SMEs that have seen improvement in the domestic economy has grown to 41%. This number was the biggest increase ever seen and compares to 20% in the previous quarter and a mere 7% at this time a year ago. • Similar to last quarter, the vast majority of SMEs that feel the economy has improved are confident the improvement is sustainable (87%). • 50% of SMEs feel the general business environment in the UK will improve, up from 37% in Q2 and 29% in Q1 2013 (the first quarter this question was asked).
Improvement in domestic confidence outstrips that in global trade conditions • Optimism about international trade conditions has also hit a new high, with 77% of SMEs expressing confidence in them, beating the previous record of 68% set in Q4 2012. • Only 30% of SMEs say that the international trade aspect of their business has been adversely affected by the UK economic climate. This number is consistent with past quarters, which have ranged from 30-36%. • Confidence both in an export-led recovery and an expected increase in international trade activity in the next 6-12 months remain relatively steady at 38% and 64%, respectively, compared to 33% and 59% last quarter.
KERRY AGIASOTIS Chief Commercial Officer Western Union Business Solutions, said: “Small and medium-sized businesses are embracing improved economic conditions. In Q2, larger companies were expressing optimism, but this has been slower to trickle down to SMEs. What we are seeing now is the first significant rise in SME confidence as domestic economic data grows stronger. It is particularly encouraging to see that Britain’s SME manufacturers are finally expressing more confidence, but retailers continue to feel the pain of reduced individual and family budgets. SME sentiment indicates that we are in the midst of a real recovery but its sustainability is still being questioned. The green shoots we are seeing could easily be crushed by a seismic event, such as a renewal of the sovereign debt crisis in Europe. It is too soon to be complacent.”
Manufacturing SMEs lead the charge in improved outlook • Nearly three quarters of SME manufacturers expressed confidence in the UK economy (72%), compared to 64% of retailers. • Retailers are also more concerned about domestic conditions having a negative impact on international activity, with 39% saying their global trade has been adversely affected by the UK economy compared to only 24% of manufacturers. • Nearly one in five SME retailers (19%) think the UK economy has worsened over the last six months, compared to only one in ten manufacturers, whilst 42% of manufacturing SMEs believe there will be an export-led recovery in the UK, compared to 29% of those in the retail sector. Eurozone concerns fall by nearly 50% compared to 2012 • Only 34% of SMEs expressed anxiety about Eurozone instability, compared to 58% last quarter and 61% in Q3 2012. • Worries about Government austerity measures have also fallen from 42% last quarter to 34% (flat on Q3 2012), whilst confidence in the Government’s policies on international trade remain steady at 46% (compared to 42% last quarter and 38% year on year). • The overall health of the global economy, however, remains the overriding concern amongst SMEs, with 72% naming it as a worry (compared to 76% last quarter).
MEDIA ENQUIRIES: Jennifer Berlin Tel: +44 (0) 207 426 4457 [email protected] Lauren Franze/George Parrett: Tel: 020 7382 4747 [email protected]
International Trade Monitor OCTOBER 2013 Powered by TNS Research
Emerging market volatility impacts trade levels Modest shift in SME trade with emerging markets balanced by uptick in European expectations The overall increase in exports seen since Q4 2012 has largely remained intact with SMEs that have customers in major markets including China, Russia, North America and Brazil remaining in line with the previous three quarters. SME exporters with
KERRY AGIASOTIS CONTINUED: “UK SMEs are once more looking to their traditional trade partners in Europe for growth, an encouraging sign that the emerging confidence is not limited to the UK economy.
customers in India, however, have fallen for the first time in a year, from 15% to 11%,
We have seen an increase in SMEs
corresponding with a steep decline in the value of the Indian rupee. Exports to Africa
seeking customers abroad over the past
and Australasia also fell, from 21% and 23% to 14% and 16%, respectively.
year and it is positive to note that 40
Import activity has also seen a slight change, with UK SMEs buying from India falling from 15% to 10%, and from other Asian markets from 22% to 17%. Imports from other markets remain relatively steady quarter on quarter.
per cent of the companies we surveyed expect to grow their trade with emerging markets. Market volatility and reverse capital flows, however, can have an
Whilst the overall figures for trade with Europe remain steady, 35% of SMEs
impact on their international prospects,
surveyed expect to see their trade with the Eurozone increase in the next six month,
which was clearly demonstrated this
a 10% increase quarter on quarter. Only 5% expect trade with Europe to decrease,
quarter by the dip in trade with India.
the lowest number on record. 40% of SMEs expect to see their trade volumes with emerging markets increase (flat on last quarter) whilst a mere 1% expect to see them decrease.
The prospect of rising interest rates and policy changes will continue to influence emerging economies in 2014. Increased
Concerns about credit ease; currency volatility, customer loss and cash flow
SME exposure to global markets means
worries persist
there is an increased need for them to
One quarter of SMEs surveyed expressed concerns about credit availability,
take steps now in order to protect their
representing a 10% fall from Q2, whilst one third of SMEs (32%) think credit is
margins and improve their cash flow in
easier to obtain now then it was a year ago (up a corresponding 10% from Q2). 23%
the long term.”
of companies surveyed tried to obtain credit, down from 29% in Q2, but of these, 80% were successful in obtaining it. Only 12% of businesses indicated that the likelihood of their requesting lines of credit had increased, whilst 15% of companies are considering alternative sources of finance (flat on Q2), with asset based financing, personal savings, factoring accounts receivables and peer-to-peer lending being the most popular vehicles being explored. Finally, half of SMEs surveyed are worried about currency volatility, customer loss and cash flow (53%, 51% and 47% respectively, compared to 59%, 54% and 50% last quarter).
MEDIA ENQUIRIES: Jennifer Berlin Tel: +44 (0) 207 426 4457 [email protected] Lauren Franze/George Parrett: Tel: 020 7382 4747 [email protected]
International International Trade Trade Monitor Monitor APRIL 20132013 Powered by TNS Research OCTOBER Powered by TNS Research
Western Union Business Solutions International Trade Monitor (ITM) The International Trade Monitor is the only piece of research available that
SUB-MONITORS The Western Union Business Solutions International Trade Monitor measures the overall confidence of the UK’s importers and exporters by tracking their views across three sub-monitors: the Current Situation Monitor, the Global Outlook Monitor and the Expectations Monitor.
tracks the confidence and sentiment of Britain’s SME importers and exporters and has been running since March 2010 as the Travelex Confidence Index. The research is now conducted on behalf of Western Union Business Solutions, a unit of the Western Union Company (NYSE: WU).
Overall Confidence 125 120 115 110 105 100 95 90 Jul-13 Aug-13 Sep-13
May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13
85
Current Situation Monitor 115 110 105 100 95 90 Jul-13 Aug-13 Sep-13
May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13
85
Global Outlook Monitor 130
THE CURRENT SITUATION MONITOR The Current Situation Monitor measures importers’ and exporters’ views on current economic conditions and availability of business credit. The monitor rose from 104 in May to 122 in September, the highest number ever recorded. Economic indicators throughout the third quarter continued to point towards higher growth levels with a recent report by the British Chamber of Commerce suggesting that growth over the third quarter could reach levels not seen since 2007. Whilst credit conditions remain weak, positive news about the Government’s extension of its flagship Funding for Lending Scheme made headlines and the scheme itself helped spearhead an increase in net lending in Q2. This improvement sparked hopes that an eventual recovery in the UK’s credit market is on its way. THE GLOBAL OUTLOOK MONITOR The Global Outlook Monitor measures importers’ and exporters’ views on trading conditions. This index reached a record high of 132, beating the previous high of 113 seen in November 2010. Confidence rose over the course of the third quarter on a global basis. The re-election of German Chancellor Angela Merkel steadied markets and helped the outlook for the Eurozone, which remains the UK’s largest trading partner. The US government may have gone into shut down in the fourth quarter, but prior to the lockdown, prospects for the US economy continued to reveal a modest growth outlook that almost brought about a cut or taper to the Federal Reserve’s quantitative easing programme. Economic data from Japan and China also continued to show signs of growth as fears over a hard landing scenario in China faded and Japan’s Abenomics filtered into positive economic data.
125 120 115 110 105 100 95 90
Jul-13 Aug-13 Sep-13
May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13
85
Expectations Monitor 115 110 105 100 95 90 Jul-13 Aug-13 Sep-13
May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13
85
THE EXPECTATIONS MONITOR The Expectations Monitor measures importers’ and exporters’ views on whether international trade conditions will improve over the next 6-12 months, and whether their business will see growth in its international activity. This monitor also reached a record high of 107 in September, matching the figure last seen in May 2011. During the course of the third quarter Sterling rose to 8-month highs against the US dollar and euro, which supported sentiment for importers. The strengthening pound will hold down their costs and also allow the Bank of England some time to realize its forward guidance policy. New Governor Mark Carney started his tenure there by stating that loose monetary conditions will remain in place until the rate of unemployment reaches 7%. British exporters, meanwhile, were boosted by the generally upbeat outlook for global growth as key sentiment indicators rose; the business climate in Europe continued to improve, whilst in Germany in particular new business showed its largest monthly gain in September in two years.
International International Trade Trade Monitor Monitor APRIL 20132013 Powered by TNS Research OCTOBER Powered by TNS Research
Demographics Overseas Suppliers Russia
Business location South East
2
19
London India
10
West Midlands
China
30
Australasia Brazil
6 2 5
Other South America
5
North America
25
Europe
East Midlands
8 7
Other
5
Scotland
5
Yorkshire
5 4
North East
3 2
Industry sector
11 14
Australasia
44
Wholesale Trade /Retail Trade
10
China
16 7 14
24
Business Services (Not Banking)
4
Construction
3
Transport/Storage
3
Fuel, Utilities & Mining
2
Other
20
10
North America
Source: Q2. Does your business… Q17. Which of the following industry sectors best describes the main business of your company?
33
Europe
74
Other Asia Other
8
Manufacturing
India
Other South America
North West
Source: Q16. In which of the following regions is your business located? (If more than one of the regions listed, please give head office location)
5
Overseas Customers
Africa
8
Wales
17
Source: Q18. In which of the following locations are the majority of your overseas suppliers based?
Brazil
South West
Northern Ireland 74
Other Asia
Russia
9
East England
Africa
Other
17
25 14
Source: Q18b. In which of the following locations are the majority of your overseas customers based?
MEDIA ENQUIRIES: Jennifer Berlin Tel: +44 (0) 207 426 4457 [email protected] Lauren Franze/George Parrett: Tel: 020 7382 4747 [email protected]
International Trade Monitor OCTOBER 2013 Powered by TNS Research
Our biggest challenge is getting credit and bank loans. Importer and Exporter, Wholesale/Retail Trade
I’m worried about competition from Asian contractors. Exporter, Construction
MEDIA ENQUIRIES: Jennifer Berlin Tel: +44 (0) 207 426 4457 [email protected] Lauren Franze/George Parrett: Tel: 020 7382 4747 [email protected]
There seems to be a cash flow slowdown within the industry we work in. It’s taking longer to get payments out of customers. Importer and Exporter, Transport/Storage
For me the big concern is confidence in the market place to spend money. Our biggest sector is retail and retail is struggling. Importer and Exporter, Manufacturing
The business is there but cash flow has become rather a problem to us and the banks aren’t sympathetic. Importer, Wholesale/Retail Trade
My biggest concern is cash flow. It would make life easier if cash flow was more forthcoming. Importer and Exporter, Business Services (not banking)
I guess [my biggest worry is] getting into new markets and expansions. Importer and Exporter, Manufacturing
The biggest challenge is exchange rates. We buy in and sell in [multiple] currencies so there is a risk. Importer and Exporter, Wholesale/Retail Trade
I think the idea is to grow the business and expand; to improve cash flow and reduce any risk. Importer and Exporter, Manufacturing
We need a stronger pound. If the pound is weaker we are paying more for the merchandise, which makes us less competitive. Importer, Wholesale/Retail Trade
© 2013 Western Union Holdings, Inc. All rights reserved. Western Union Business Solutions is a division of The Western Union Company. Services in the UK are provided by Custom House Financial (UK) Limited (which does business under the trade name of Western Union Business Solutions) or Western Union Business Solutions (UK) Limited (collectively referred to as “WUBS” or “Western Union Business Solutions”). Custom House Financial (UK) Limited (registered in England, Company Number 04380026, Registered Office Address: 2nd Floor, 12 Appold Street, London EC2A 2AW) is authorised by the Financial Conduct Authority under the Payment Services Regulations 2009 (Register Reference: 517165) for the provision of payment services and is registered as an MSB with HM Revenue & Customs (Registered No: 12140130). Western Union Business Solutions (UK) Limited (registered in England, Company Number 02854737, Registered Office Address: 65 Kingsway, London, WC2B 6TD) is authorised by the Financial Conduct Authority under the Payment Services Regulations 2009 (Register Reference: 536611) for the provision of payment services and is registered as an MSB with HM Revenue & Customs (Registered No: 12122416). This brochure has been prepared solely for informational purposes and does not in any way create any binding obligations on either party. Relations between you and WUBS shall be governed by the applicable terms and conditions. No representations, warranties or conditions of any kind, express or implied, are made in this brochure.
