By Kristy Dorsey
UK businesses are creating a new trading footprint around the world, a new report has found, with an estimated £50 billion of exports diverted away from the EU since the Brexit referendum in 2016.
As the UK prepares to conclude its exit from the European Union at the end of this year, a study released today by Lloyds Bank and Aston Business School has found that 18 per cent of British exporters have already changed trading partners to divert business outside the EU. In Scotland, 9% have diversified to create new opportunities outside the EU, while 34% have reviewed and made changes to their supply chains because of Brexit.
Jun Du, professor of economics at Aston Business School, said this shift goes against traditional “trade gravity” in which countries geographically close tend to do more trade.
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“Our concern lies with the vulnerabilities faced by businesses that export less, forging these paths while lacking the infrastructure and scale of multinational firms as this reverse in trade gravity typically means higher costs and greater risk exposure,” he said.
“More needs to be done to help British businesses of all sizes navigate the future of international trade.”
According to the polling, 13% of Scottish businesses plan to expand into new markets around the world. Furthermore, 19% of Scottish businesses said they are stockpiling to ensure continuity of service to customers post-Brexit.
READ MORE: Pandemic hampers business Brexit planning
Across the UK, the relative growth in exports values towards EU countries has decreased by an average of 8.7% annually during the past five years. Target markets that have benefitted from this shift include established emerging economies such as those of Brazil, Russia, India, China and South Africa, as well as Commonwealth nations Australia and New Zealand.
Gwynne Master, global head of trade for Lloyds Bank, said these changes have come as businesses have faced a myriad of challenges from the pandemic. “Despite this, businesses are taking big strategic steps that will change the shape of their import and export business and the future of the great trading nation for years and decades to come,” she added.
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