Lloyds Banking : British businesses redraw global trade footprint

British businesses are creating a new trading footprint around the world, according to a new report, A New World for Global British Business, by Lloyds Bank and Aston Business School released today.

As the UK prepares to conclude its exit from the European Union, nearly one in five British exporters (18%) have already changed trading partners to divert business outside the EU¹, showing that businesses are actively looking at new export markets. An estimated £50 billion of exports have been diverted since the Brexit referendum result in June 2016^2.

Aston Business School analysed 340,000 quarterly export transactions made by 26,000 UK exporters over a five-year period, finding that relative growth in export values towards the EU countries have decreased by an average of 8.7% per year³.

This is driven solely by Brexit uncertainty as those diverting trade beyond the EU have primarily opened up trade relationships with established emerging markets within the BRICS (Brazil, Russia, India, China, South Africa). Firms have also diverted trade to countries the UK has traditionally strong relationships with, including Commonwealth nations Australia and New Zealand.

Separate polling of 1,200 British businesses undertaken in October for the report finds 24% of all UK businesses and 29% of exporters have reviewed and made changes to their supply chain because of Brexit and 26% of exporters say they have diversified to create new opportunities outside the EU.