A survey of more than 2,300 UK SME exporters has revealed UK overseas trade continues to languish as the global economy heads into another difficult year.

The British Chamber of Commerce’s (BCC) quarterly Trade Confidence Outlook for Q4 2022 showed that the squeeze on SME exporters’ operating margins remains. Three main cost pressures continue to dominate as utilities, labour costs and raw materials are again the biggest concerns cited by exporters.

More UK SME exporters are continuing to report falling export sales (27%) than are reporting an increase (26%). In Wales, the figures are even more stark as a third of businesses (33%) reported falling export sales compared to 26% who have seen an increase in custom and bookings. A third of Welsh exporters also expect export sales to decrease in the current quarter.

Just over a third of UK SME exporters (36%) expect to see increased profitability in the next 12 months, while an almost equal number (35%) expect a decrease. Almost 40% of business in Wales expect profitability to decrease over the next year but around 60% of businesses are more optimistic that profitability will increase or remain constant.

Paul Slevin, Executive Chair of Chambers Wales South East, South West and Mid, said:

“The results of the BCC’s Trade Confidence Outlook and our quarterly economic survey reveal the challenges exporters continue to face and the consequent impact of these factors on business confidence.

“The war in Ukraine, Brexit and China’s reopening after rolling lockdowns may contribute to additional supply chain volatility this year and it could be some time before global shipping and trading systems return to normality.

“Amid such uncertain trading conditions, governments must do their part to help SME businesses to turn their fortunes around, especially as Wales is an export-intensive nation. We need a clear strategy to build and sustain trade volumes.”