Engineering export confidence is at its lowest point since the recession of the early 90s according to the latest DHL Quarterly Export Indicator which for six years has tracked the view of Britain’s manufacturing exporters.
The impact of the strong pound coupled with the Far East financial crisis and growing fears of worldwide recession mean that only 22% of engineering exporters expect increases in orders in the next three months – 76% predict their order books will either be reduced or stay the same.
The strong pound is by far the biggest cause for concern among engineering exporters: 82% say that exchange rates will have a negative impact on their sales over the next 12 months. Nearly 30% of engineering exporters are expecting a recession within the next year.
Less than 30% of engineering exporters are taking advantage of the global shop front offered by the Internet. Accountants, Price Waterhouse estimate the global worth of e-commerce to be $434bn by 2002 – an enormous opportunity which exporters will miss out on if they stay off-line.
According the DHL QEI, 63% of engineering exporters would welcome British participation in a single currency. This is in line with the 64% of exporters throughout the whole of the UK.
According the Nick Butcher, managing director of DHL International (UK), `It is extremely worrying to see export confidence at the kind of levels not seen since the last recession. Over the past year we have seen growing anxiety among exporters first about the strength of the pound and more recently about the Far East financial crisis. These two pressures have combined to produce a marked slump on export confidence since the start of the year. It will take some significant improvements in these two factors to prompt exporters to adopt a more optimistic outlook and those improvements do not appear to be imminent.’