The latest Aldermore Future Attitudes report has found that over four fifths (84%) of UK SMEs in the IT sector who are trading overseas expect to see their exporting business revenues increase by an average of 10% over the next 12 months.
The report found that currently nearly half (48%) of SMEs in the IT sector export overseas. The research further reveals that of the SMEs in the IT sector that don’t currently export, just over a quarter (28%) plan to do so in the next five years.
Of those SMEs in the IT sector that do trade abroad, over half (51%) of their total revenue was generated by exports in the last 12 months, equating to £909,000 per business on average. Additionally, over half (56%) revealed that this figure has increased since last year.
When looking at the global destinations that SMEs in the IT sector are currently exporting to, Europe (67%) remains the most popular market, with nearly three fifths (58%) exporting to North America and just over a quarter (26%) to Asia.
Top five most popular continents for SMEs in the IT sector to export to:
|Continent||% of SMEs exporting|
Despite the UK potentially leaving the customs union and single market in the future, over half (54%) of SMEs in the IT sector believe Europe is their greatest prospect for growth in the short term, with it also topping the list as the most favourable destination in the medium and long term (42% and 42% respectively).
When asked to detail the main challenges to exporting, over a quarter (28%) of business owners in the IT sector admitted the primary obstacle is Brexit, closely followed by regulatory differences (24%) and lack of guidance from the UK government (22%).
Carl D’Ammassa, Group Managing Director, Business Finance at Aldermore, said: “As the uncertainty around Brexit continues to concern the small business community, it is encouraging to see that nearly two million SMEs are exporting to overseas markets, and are in a much stronger position as a result. With recent Government statistics revealing a £60m (10.4%) increase in UK exports compared to last year* and internationally-focussed small and medium sized businesses remaining confident of growth, the next five years could see strong progress for the SME sector.
“We hope that small businesses can make the most of the opportunity to export to new markets and continue to deliver vital support to the wider UK economy.”
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