Insider Media Limited

Competing with low production costs and a lack of local knowledge are some of the biggest barriers that are preventing businesses in the North West from increasing their overseas exports, new research from Insider and Ernst & Young has revealed.

Insider’s first survey of international trade, carried out in association with Ernst & Young to analyse the activities of regional companies exporting overseas, found that 26.5 per cent of businesses surveyed said that production costs were a major challenge.

Local knowledge was the second major challenge (17.6 per cent), while increasing regulation was third (16.2 per cent). Funding shortfalls and poor delivery networks also ranked highly.

The survey found that more than half of companies (54.8 per cent) said they already export, while 11 per cent plan to start in the near future. But a total of 34 per cent said they have no plans to start trading internationally.

Of the companies that already export, 46.8 per cent said they have done so for 20 years or more. A total of 22.8 per cent have done so for one to five years; 15.2 per cent for six to ten years; and 15.2 per cent for 11 to 15 years.

Other trends that emerged from the survey were the importance of Europe and North America as export markets, with 85.1 per cent of businesses saying they already export to countries in Europe and 52.7 per cent saying they traded with North America. The two continents also came top of the destinations businesses are looking to develop new opportunities.

And while the attraction of the Far East is obvious, the survey found that only a small proportion of UK trade actually goes in this direction. A total of 29.7 per cent of businesses said they export to China and 24.3 per cent to India.

"In early 2011 the Ernst & Young ITEM Club reported that the UK as a whole had been consistently losing its share of the global exports market since the Second World War," said Noam Handler, international tax partner at Ernst & Young.

"Therefore it was encouraging to find that 46.8 per cent of North West businesses have been exporting overseas for more than 20 years – so we have some valuable expertise to draw on in the region."

He added: "The rapid growth of the BRIC (Brazil, Russia, India and China) economies has been widely reported and penetrating these regions has been key to the success of competitive nations such as Germany, so it is interesting to see that North West businesses are still dipping their toe in exporting to markets closer to home."

The full results of the international trade survey have been published in this months' North West Business Insider, which is out now.