Institute of Directors delivers mixed news

Almost half of exporters increased the volume of their exports over the last year, according to a survey of IoD businesses, despite facing difficult trading conditions. However, less than a third were able to increase the profitability of their export businesses. The report, which incorporates the results of an NOP survey of Institute of Directors members carried out towards the end of last year, shows that: - 46% of firms increased their export volumes over the previous twelve months; 20% experienced a reduction; for 34% there was no change at all; and 1% did not know. - 31% of firms reported that the profitability of their export business had increased over the last twelve months; 22% said that it had decreased; 46% said that it had stayed the same; and 2% did not know or refused to answer. - 48% of directors reported that weak overseas markets had impaired their export performance; 47% said that the strong pound/weak euro had been an impediment; and 45% stated that the strength of international competition had been another difficulty. Some 32% considered that late payment by customers had been a problem; and 19% said that lack of credit/finance to fund exports had been a difficulty. - 78% of directors financed their export business by means of their own resources/retained profits; 12% used bank loans; and 10% relied on bank overdrafts. Richard Wilson, Business Policy Executive at the IoD, said: "Many firms in our survey have successfully increased export volumes over the previous twelve months, but only a minority of them have been able to enhance the profitability of their export businesses. Economic difficulties in America, euro-zone and Japan have, amongst other factors, served to depress demand for UK exports. "Ultimately, success or failure in winning export orders lies in the hands of individual businesses. Every exporting firm has to improve the quality of its products and services, enhance productivity and convince potential customers that they are getting value for money, if their business is to be successful. "However, the Government can help exporters by promoting stable economic growth and competition in the UK, easing the entry of UK exporters into foreign markets and reducing the tax take from businesses in order to leave them with more working capital. The Government should also aim to reduce the regulatory burden on businesses in order to keep the costs on their activities down." MF