Global markets benefit more from the South East’s expertise than any other UK region, according to accountancy and business advisory firm BDO LLP.
According to BDO’s new research, medium-sized businesses in the South East (exc. London) export goods and services to a total value of £9.7bn.
This means £1 of every £4 exported comes from mid-sized firms, despite them making up less than 1% of all firms in the region*.
Consumer markets, such as retail and leisure, are the most prolific regional exporters with overseas sales totalling £3bn. Professional services is the second biggest exporter (£1.9bn), followed by manufacturing (£1.6bn).
The research also underlined the strength of the South East’s TMT sector. It showed that medium-sized TMT companies export £1bn goods and services out of the South East each year, accounting for almost a third (28.5%) of all UK TMT sector exports.
The value of these overseas sales is significantly higher than those reported in any other region, and more than Scotland, Northern Ireland and Wales combined. The East of England, which exports TMT services to the value of £374m, is its nearest competition.
David Eagle, partner at BDO LLP in the South East, says medium-sized firms are still under-valued when it comes to their contribution to UK growth and economic recovery.
“As policy makers strive to rebalance the economy, it’s crucial they recognise how much regional mid-market firms can contribute. What’s exciting, yet equally frustrating, is that they’d have even more export potential if the right support was in place,” says Eagle.
“There is considerable appetite for international expansion among South East firms. It’s now up to the government to put the right policies in place and give companies the tools to thrive both here and abroad.”
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.
