The value of goods exported from and imported into the UK will decline by 3.2% and 0.8% in real terms in 2023, research from business insurer QBE has found, with exports failing to fully recover before 2026, reflecting the slowdown in world and UK growth.
According to a new report from QBE, Global Commerce: UK Forecast for International Trade, it is expected the annual growth in goods exports will recover to 1.7% in 2024 and 2.6% in 2025. Conversely, the recovery in the annual growth in imports of goods is forecast to be more rapid, reaching 2.9% and 2.7%, respectively.
UK trade has been hit by a unique set of challenges over the past few years. Alongside issues affecting global supply chains – such as the impacts of the Covid-19 pandemic and of Russia’s invasion of Ukraine – the UK’s importers and exporters have also had to adapt to the impact of Brexit on their operations.
New checks on goods at borders have created paperwork and delays, and the end of free movement has contributed to haulier shortages, while new trade deals have done little to open up new markets.
Chris Wallace, Executive Director, QBE UK, said: “The coming years are likely to see governments across Europe and beyond looking to ensure access to critical goods. Some businesses will benefit from shorter supply chains, but few are likely to be able to insulate themselves from the impact of global events on trade flows.”
Moving forward, UK businesses engaged in international trade should keep an eye on evolving post-Brexit rules and relations, which are likely to continue to evolve in coming years. They will also need to be prepared for the potential escalation of geopolitical tensions and the continuation of recent trends around nearshoring and onshoring.
The report also recommends strategies such as carrying out market research on current and prospective trade partners and trying to diversify export markets and simplify supply chains to mitigate potential risks.
Chris Wallace added: “The most effective way of minimising the risks involved in international trade is to ensure business activities are insured. Although nowadays shipping processes are quite safe, there is always some degree of risk. Buying insurance coverage is a way of mitigating financial losses in case something goes wrong. This can cover issues such as products damage, theft, and cargo losses.”
Research for the report was conducted by Oxford Economics and Control Risks. The full report is available here. https://qbeeurope.com/sector-resilience/global-commerce-uk-forecast-for-international-trade/
