Nine in 10 UK companies are confident they will be able to boost international trade over the next two years (92%), despite increased costs, according to the findings of HSBC’s Trade Pulse survey.
After a flurry of trade announcements in recent weeks, nearly half of the 1,000 UK businesses surveyed said that despite the impact of tariffs and trade uncertainty, business has generally been positive so far (48%) and over half believe there will be a positive impact on trade over the next two years (56%).
Many respondents also said they see trade pressure as a catalyst for growth, with 76% saying it has encouraged them to evolve and seek new opportunities.
More than nine in 10 (94%) have already adopted new technologies or platforms, 92% have or are planning to enter a new import or export market, 94% have improved internal efficiency or cost structures, and 91% have launched new products or services.
Despite this optimism, UK businesses have concerns about rising costs, three quarters said that they have seen an increase in the cost of doing business during the uncertainty so far (69%) and the majority expect to see business expenses continue to rise in the short term (77%) as well as the long term (74%).
As a result of this uncertainty, businesses are being forced to rethink their long-term business model or their strategy altogether (72%), and ongoing trade uncertainty has made them cautious about expansion and investment (73%).
Stephanie Betant, head of Global Trade Solutions, HSBC UK, said: “We know how resilient UK businesses are and they’re right to be optimistic about their long-term international growth. The UK economy’s reliance on the services sector, which is less exposed to tariff-related pressures is an advantage.
“With attention having been on global trade for some time, most businesses have already or are prepared to move at pace to make changes.
“While for some this has meant pausing decisions on investments, others have proactively sought out new opportunities, whether that is by diversifying their offering or expanding into new countries.
“Businesses are looking for greater clarity but continue to show great resilience and adaptability in the way they operate. Many are even seeing the ongoing uncertainty as a catalyst for growth despite rising costs.
“Navigating this climate requires not only agility but strong partnerships to ensure sustained growth. Almost all of those surveyed saw the role of their banking partners becoming increasingly important for businesses over the next 2-3 years in light of trade-related volatility (95%).”
To mitigate these risks, businesses have already taken or are planning to expand into regions less affected by trade disruptions (86%), adjust their prices to reflect higher costs or market changes (86%) and are exploring partnerships to strengthen their market position or supply chains (77%).
Nine in 10 UK businesses said they were already equipped for ongoing disruption (87%), having diversified suppliers (88%), utilising inventory buffering (86%), nearshoring or friendshoring (82%) and reshoring (81%) to meet the ongoing challenges.
