Business Matters: The eurozone crisis - rising to the challenge
Marc Henstridge, head of risk at Atradius UK & Ireland, shares his views on where the major export opportunities are for businesses.
At the time of writing, there is some real risk that the eurozone crisis could tip the UK back into recession and this economic uncertainty, coupled with global demand remains the biggest challenge for the UK’s businesses. We've now seen the 17 eurozone ministers acknowledge that their rescue fund will not suffice to protect Italy with its €1.9 trillion of debt, let alone fight off contagion across the whole zone.
It is acknowledged that we are now staring down the barrel of a two speed recovery, with Asia and Latin America in one chamber and all the so-called “advanced” economies in the other. Here in the UK, whose principal export partners have historically been those eurozone countries and the USA, we are mired in the latter – what we now need is a jump towards the former.
There are some signs that markets further afield are already feeling some strain at the eurozone fallout – China, for example, is expected to release figures shortly indicating that following a prolonged period of double digit GDP growth, its economy may be on course for some correction – but don’t let this dissuade you. These markets are still worthy of our attention for seeking out new trade opportunities.
Asia and Latin America currently lead recovery with real GDP growth of 4-5 per cent versus a global average of 3 per cent. Here in the UK, next year’s forecasts have just been revised down to just 0.7 per cent. It doesn’t take a genius to figure out that the biggest opportunities for businesses are not necessarily to be found on our own doorstep.
In my last column, I was emphatic about the fact that this isn’t time for Britain’s businesses to be coy and to get out there and trade our way out of the downturn. Today, I feel this more keenly than ever. What remains to be seen is whether British businesses have both the agility and the ability to adapt, change and succeed in order to meet the challenges of the current trading environment.
