A survey of global business leaders by Grant Thornton has revealed that international planned exports have hit an 18-month high, but the report has also highlighted the importance of agility to exporters.
The latest International Business Report is a survey of 2,500 businesses in 36 economies and shows how healthy increases in investment and consumer spending, coupled with steadily falling unemployment, are being reflected in positive business sentiment. Business leader optimism in Eurozone countries, for example, is at almost a two-year high of 43%.
Among the key findings for the first quarter of 2017 are that export expectations are up on the previous six months, by 3% among G7 countries and 2% in the EU. This is, in large part, due to the political shift in the US which has created a strong dollar and put imports at a competitive advantage compared with local products.
Richard Ratcliffe, a director of Grant Thornton in the Isle of Man, said the survey showed that exporting businesses need to be agile in order to benefit from sudden shifts in political and economic conditions in other countries.
He explained: ‘It appears the resurgent US market, and unexpected economic improvements in other countries, have created trade conditions which can benefit exporters, whether they are here in the Isle of Man or in many other countries.
‘This is reflected in the IBR findings which show export expectations up, with those firms agile enough to change business plans to meet sudden and unexpected political and economic shifts set to benefit. The Isle of Man is an agile jurisdiction, and while our manufacturing industry is relatively small there are opportunities there, as well as for companies engaged in other exporting industries.’
He added: ‘However, while there are short-term gains for some, the longer-term picture is far from certain. The recent and upcoming political developments, such as those we have seen in the US under its new President, have the potential to upset emerging and longstanding multilateral trade agreements in favour of bilateral agreements and protectionist policies. Sudden shifts in trade policy create opportunities, but they also lead to an uncertain environment for exporters.
‘This does not apply just to the US; Brexit negotiations are under way with no clear picture of what the future holds, and the German federal elections later this year have the potential to disrupt longstanding trade arrangements. Businesses need to carefully monitor events like these to assess the possible impact on export plans.
‘Despite the uncertainty regarding future trade policies the underlying economic fundamentals are improving which will provide opportunities for exporters. To seize the opportunities in these dynamic environments exporters will need to build agility into their business. Exporters will need to remain vigilant and put in place mechanisms that enable them to spot and assess the impacts of changes in trade policy on their traditional markets while seeking opportunities in new markets.’
To find out more about the findings of the latest Grant Thornton IBR, the full report can be read at www.grantthornton.global/en/insights/articles/in-uncertain-times-agility-is-a-necessity-for-exporters.
Photo - Richard Ratcliffe.