Medium-sized businesses, which make up less than 1% of all firms in the South West, account for £1 of every £4 exported from the region, according to new figures from accountancy and business advisory firm BDO LLP.
Overall, sales abroad total £3.2bn among mid-market companies in the region, representing 5% of all UK exports by mid-sized firms.
However, despite the impressive contribution, the South West’s mid-market is falling behind other regions when it comes to sales abroad. The value of exports from medium-sized businesses in the North West (£6.4bn), West Midlands and East of England (both £6.3bn) is double or nearly twice the size.
The South West’s consumer markets sector (retail, wholesale and leisure) is the most prolific exporter, accounting for a third of all goods and services sold to overseas markets (£992m). Meanwhile, medium-sized manufacturers export £834m and professional services come in third with £462m.
Andrea Bishop, audit partner and head of BDO LLP in the South West, says medium-sized firms are still under-valued when it comes to their contribution to UK growth and economic recovery.
“Approximately 75% of all mid-market exports take place outside London and South East, yet the government’s focus still lies heavily on London. As policy makers strive to rebalance the economy, it’s important to recognise that regional mid-market firms contribute significantly. What’s exciting, yet equally frustrating, is that they’d have even more growth potential if the right support was in place,” says Bishop.
“The appetite for international expansion is there – we saw that in spades at the Export Week roadshow that took place in the South West last week. It’s now up to the government to put the right policies in place and give companies in the region the tools to thrive.”
As part of its Mid-Market Manifesto, BDO is calling on the government to consider three policy recommendations to help mid-sized businesses make the decision to export more confidently.
These are to introduce a VAT zero rating to companies that supply to qualifying exporters, something that is already in place in Ireland; agree an exemption from local taxes up to a £1m threshold for when businesses open a new branch or subsidiary overseas; and a review of the unintended consequences of the Bribery Act which, by its sheer complexity, is acting as a real regulatory barrier for new exporters.
