Double Dip Recession Still Feared, but UK Exporters Bullish About Future
The Travelex Confidence Index (TCI) has found an increase in importers and exporters confidence in international trading conditions. The TCI has increased by six points to 108 since April 2010. There has also been a slight increase in confidence (1%) that longer-term international trading conditions will improve over the next 6-12 months.
Importers and exporters are increasingly confident in an export-led recovery. There was a 2% increase in May in the number of exporters and importers who felt confident of an export led recovery, increasing from 49% in April to 51% in May.
However, 30% feel that the UK economic situation has worsened over the past 6 months. The survey found that importers and exporters confidence in the UK economic climate has fallen 8% since March 2010. In a separate survey conducted to supplement the TCI, 46% importers and exporters said they were concerned the UK would fall back into recession.
David Sear, global managing director at Travelex Global Business Payments, said: “The 8% slump in importers’ and exporters’ confidence in the UK economy suggests that our economy is not out of the woods yet. However, while recovery continues to be rocky, the index shows that UK exporters are confident we can export our way out of it. Their optimism really highlights the level of self-confidence and self-belief UK entrepreneurs have in their businesses, despite ongoing economic turbulence.
“UK importers and exporters increased confidence in international trading conditions clearly contrasts their depressed assessment of the UK economic climate. The threat of swingeing spending cuts, higher taxes and the ongoing turmoil in Europe are clearly the main drivers behind this. Certainly, a double dip recession remains a distinct possibility as the UK economy faces some major headwinds. Despite this, we have seen increasing resilience in importer and exporter confidence when it comes to international trading conditions. SME importers and exporters are clearly positioning themselves as the growth leaders for the UK economy.
“In the upcoming months, we will be closely monitoring whether healthy economic growth and confidence in international trading conditions can be sustained when stimulative measures are withdrawn from the UK economy,” he added.