Service sector has potential to boost UK’s overseas trade, British Chambers of Commerce survey says
7 August 2015
The service sector holds the key to unleashing the UK’s export potential, according to the latest British Chambers of Commerce (BCC) annual international trade survey.
The UK’s strong service sector, particularly financial and business services, had an £86bn trade surplus in 2014, partly offsetting the overall £121bn trade deficit in goods, the BCC survey says.
Encouraging more service firms to export could go a long way in achieving the government’s target of doubling exports to £1tr by 2020 as well as helping to eliminate the UK’s long-standing trade deficit, it adds.
According to the survey of more than 1,227 UK service firms, 23 per cent of service sector firms currently export, 17 per cent are on the verge of doing so and a further 59 per cent of service firms still do not export.
The survey also identified that only 18 per cent of the service sector firms that currently export are ‘recent’ exporters that have been trading overseas for up to two years.
The survey report says that without the UK’s sustained strength in selling services overseas, the UK’s trade deficit would be much bigger. It adds: “The services sector could hold the key to unleashing the export potential of the UK which is why there must be more support available to those firms that are on the verge of exporting taking the first step.”
However, looking at service firms that do not export, the survey says that many continue to cite language or cultural differences, regulation and access to finance as the biggest barriers to entering international markets.
Director General of the British Chambers of Commerce: John Longworth, says: “The BCC is building a global business-to-business network and is calling for a reduction in red tape support for more young people to ‘think global’ and acquire knowledge and skills that are highly valued by Britain’s exporters and greater access to finance to new and existing exporters.”
The survey adds that it is often overlooked that 2014 saw the UK record its highest ever surplus in trade in services, at £86bn, equivalent to five per cent of GDP.
It says: “The UK is known for its international excellence in services, in particular financial and business services, all of which will continue to be in demand from the growing middle classes and business sectors in emerging markets.”
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