Time to take a risk, says Coventry business expert
‘Risk averse’ manufacturers in the Midlands are stifling potential growth in exports, according to a Coventry University Business School academic. Professor David Bailey said companies unwilling to take a risk by trading aboard are “stalling economic growth in the region”.
Professor Bailey said the UK was too reliant on the US and Eurozone for its exports and needed to look further afield to countries with expanding markets, such as China and India.
“We are going to see fairly sluggish growth in the UK given the scale of government cuts coming through and there is uncertainty in our major export markets in the US and Eurozone,” he said.
“Manufacturers therefore need to take more risks and look much further afield for export opportunities. The only way we can rebalance the economy and drive growth in the region is if manufacturers make a concerted effort to target export markets in the Far East and Asia, for example, which, if successful, will also help boost employment.”
Professor Bailey made his comments at Deloitte’s annual Midlands Manufacturing Dinner in Birmingham.
He also said that although there had been modest growth in export markets, the growth had not been as much as expected.
He added: “I think there are two reasons for this. Firstly, we are too reliant on the Eurozone as our major exporters and, secondly, manufacturers have looked to take the opportunity of the exchange rate depreciation to increase prices abroad, boost profits at home and not increase volumes.
“So what we now have is risk averse manufacturers holding back possible growth in exports, which at some point needs to be tackled.”
Jane Lodge, Midlands manufacturing industry leader at Deloitte, said the export market was critical to Midlands manufacturers.
She said: “As we move forward out of recession it is important that we are able to export goods and services all around the world, in order to bring in the revenues we need to the region.”
“What we need to see is more businesses in the Midlands taking a risk and looking to export to China and India, where our exports are at a woefully low level compared to some of our competitors.”
