Strong sterling fails to hinder UK exporters
Britain’s manufacturers are seeing a sharp rise in exports despite unfavourable exchange rates, according to survey data released today by the British Chambers of Commerce (BCC) and delivery firm DHL Express.
A greater number of export orders was seen by 46 per cent of manufacturers in the first three months of the year. It compares with 36 per cent in the final three months of 2014.
Firms in the UK’s dominant service sector saw the rate of growth of exports hold steady, with 33 per cent reporting an rise in orders in both the final three months of 2014 and the first three months of 2015.
“Encouragingly, the increase in export sales and orders has come about in spite of the rise in the pound against the euro over recent months – a credit to the strength and expertise of the UK’s manufacturing sector,” said BCC director general John Longworth.
In March, the pound reached a seven-year high against the euro. A strong pound makes goods and services produced in the UK more expensive to foreigners.
Sterling’s strength is a concern for many exporters – 55 per cent of manufacturers said that exchange rates are having an impact on their ability to trade globally, compared with 34 per cent at the same time last year.
Longworth also expressed concern over the UK’s trade deficit – the amount imported over the amount exported – which grew to £2.86bn in February, according to official figures. But many economists attribute a large part of this to the fact that the UK has grown faster than its trade partners, with UK demand for foreign goods exceeding foreign demand for UK goods.