Business development Fred Heritage · 24 July 2017
Currency volatility continues to damage importer confidence
Unpredictable foreign exchange rates continue to challenge small UK business owners in the wake of last year’s Brexit vote, with importer confidence damagedmost from current conditions, new research from American Express has shown. The fall in the value of the pound over the last year has seen the profit margins of smaller UK importers squeezed by 13 per cent on average, while 81 per cent have seen their business negatively impacted as a result of the Brexit vote. The majority of small importonly firms 61 per cent have had to increase prices on goods and services, with an average hike of nine per cent. Meanwhile, a lack of importer confidence has meant a third of firms have made plans to increase prices over the next year. The research, conducted by American Express and analysts East & Partners, revealed a different picture for smaller UK exporters, who were found to have mostly benefitted from the fall in the pound’s value. Out of more than 2, 000 small business owners questioned in a survey, nine out of ten small exporters claimed their margins had gone up by 16 per cent on average. Some 95 per cent of small UK businesses that are already exporting intend to ramp up exporting plans further in the next year. The study found that small UK businesses currently participating in both importing and exporting activities were most confident. As many as 95 per cent of these businesses owner also said theyd experienced a positive business impact from the fall in sterling’s value. Commenting on the data, senior vice president for European global commercial payments at American Express, Jose Carvalho, said: Those already involved in exporting are seeing the business benefit, and whilst others currently focused on domestic activity might be daunted by the idea of exporting there areplenty of resources out there for ambitious businesses.
ABOUT THE EXPERTFred Heritage
Fred Heritage was previously deputy editor at Business Advice. He has a BA in politics and international relations from the University of Kent and an MA in international conflict from Kings College London.