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UK World’s 4th Biggest Exporter

 

 

Figures from the UN Conference on Trade and Development (UNCTAD) published last week have shown that the UK is now the world’s 4th biggest exporter.

This might come as a surprise to people who watch the news each night and see story after story about a failing Britain, but the truth is, as always, that Britain is open for business and remains a major player on the world economic stage.

It’s worth noting however that these numbers include all exports, and a significant percentage therefore relates to services rather than physical goods.  The UK’s services exports grew to a record high of £470bn last year, with professional services, such as research, consulting and technical and trade services, contributing £185bn in 2023.

The UK is 8th on the list of world exporters when it comes to manufactured goods, with a total of £224 billion in manufactured goods output in 2023.   Manufactured goods make up 49% of all UK exports.  8th place is still one position better than the previous year and is perhaps higher up the table than many people would have guessed.  It might be of interest that the USA is the UK’s biggest export market accounting for £56.7bn, or just over 25% of all exported manufactured products.  There is scope for this to increase substantially if a trade agreement is reached with the US after the next Presidential election.

Why is the UK doing so well in terms of exports?  There are plenty of reasons.

Diverse Export Portfolio

One of the key strengths of the UK’s export sector lies in its diversity. The UK exports a wide range of goods and services, from vehicles and machinery to financial services and pharmaceuticals.

Vehicle manufacturing, led by iconic brands like Jaguar Land Rover and Rolls-Royce, contributes significantly to the UK’s export revenue. The aerospace industry is another major player, with companies like BAE Systems and Airbus UK exporting high-tech aircraft and components to markets around the world. The manufacturing sector employs 2.6 million people in the UK.

Financial services, centred around London’s global financial hub, also make a substantial contribution to UK exports. The City of London is a leading centre for banking, insurance, and asset management services, attracting clients and investors from across the globe.

Innovation and Technology

The UK’s commitment to innovation and technology has been a driving force behind its export success. The country is home to some of the world’s leading universities and research institutions, fostering a culture of innovation and entrepreneurship.

Tech startups and established companies alike are developing cutting-edge technologies in fields such as artificial intelligence, biotechnology, and renewable energy. These innovations not only create new export opportunities but also enhance the competitiveness of UK exports in global markets.  The manufacturing sector contributes 41% of all business R&D.

Global Trade Partnerships

The UK’s export growth has also been supported by its active participation in global trade partnerships. Despite the challenges posed by Brexit, the UK has been successful in negotiating new trade agreements with countries around the world, including Japan, Canada, and Australia.

These trade agreements have opened up new markets for UK exporters, reducing tariffs and trade barriers and providing them with greater access to global supply chains. Moreover, the UK’s membership of organizations like the World Trade Organization (WTO) and the G7 enhances its position on the global stage.

The Department for Business and Trade (DBT) is still negotiating several trade agreements, including with India, which have been put on hold until later this year and last month signed a trade pact with Texas, the second biggest US state and the world’s eighth largest economy.

Challenges Ahead

While the UK’s export sector has shown remarkable resilience and growth, it still faces challenges that need to be addressed. Infrastructure constraints, skills shortages, and regulatory barriers can hinder the competitiveness of UK exporters in global markets.

Geopolitical uncertainties and global economic volatility can pose risks to the UK’s export-driven growth.  Thanks to various UK government policies, and the green agenda, the UK pays more for its energy than many of the countries ahead of it on the manufacturing exporter list, and this places significant cost pressure on UK manufacturers who are competing on the world stage.

Financing                                                                                                                                                                                    

The UK’s status as the fourth-largest exporter in the world is a remarkable achievement that highlights the strength and dynamism of its economy. With its diverse export portfolio, commitment to innovation, and proactive approach to global trade partnerships, the UK is well-positioned to capitalize on new opportunities and overcome challenges.

As the UK continues to navigate the post-Brexit landscape and the evolving global economic environment, maintaining a strong focus on promoting exports providing finance to companies involved in exports will be essential, especially those companies involved in manufacturing.  The manufacturing sector accounts for 16% of UK business investment and this number needs to grow if the UK is to improve on its 8th place ranking.

Here at Seneca, we provide revolving trade and stock finance to UK SMEs involved in import and export.  We fund all sectors and assist all manner of companies; from startups just getting going with their first orders, to established businesses looking for growth in new markets with new customers.  Our sector-leading back-office technology and client-facing App allows us to make fast decisions and provides our clients with full transparency and control over their revolving working capital facilities.

If your business or any of your clients’ businesses, could utilise a revolving stock finance facility, please contact us for more information.  We love to chat about this stuff.

 

 

 

 

Client Case Study – AAC Waterproofing Ltd

 

AAC Waterproofing Ltd (AAC) have announced a record year following the addition of Seneca Trade Partners stock finance facility.

AAC supplies and installs flat roof materials for new build and refurbished commercial and domestic buildings across Wales and North West England. Seneca provided AAC with a stock finance facility back in November 2022, on the basis that their order book for 2023 was shaping up to be a record-breaking one for the company.

Bigger contracts come with increased upfront purchasing costs and AAC were keen to ensure that delivery of their projects would not be impacted by working capital constraints as the company grew.

Funding materials that are going into installation can be a tricky area for many stock funders. At Seneca we pride ourselves on offering the UK’s most flexible stock finance; we never ask our clients to alter the way they use stock we have financed, or to alter any contractual arrangements between themselves and their customers to make reference to financed stock. After all, our clients are the experts in their field so we trust them to get on with their job, whilst we undertake to make funds available at their request. It’s a stock financing model that has served us well since we started in 2016.

Stock purchases and repayments are not tied to individual project completion with a Seneca facility, and we do not charge any service fees or non-utilisation fees. Our clients only use their stock finance facility when they need it, and they can pay it back in full or in part, when it best suits them to do so.

With the assistance of a Seneca stock finance facility, AAC increased their turnover by 48% in 2023 compared to the previous year. AAC remain a valued Seneca client and will be using their flexible stock finance facility to assist with the even larger 2024 order book.

Any sector? You bet!

 

After a record month in July, August and September have been slightly less frantic in terms of onboarding new clients, however we’ve still provided over £1.3m of stock funding to new clients across a range of sectors.

One of the most interesting aspects of stock finance is that we never know what deals are going to come through the door each day. Our network of business introducers operates across all sectors and the clients that they introduce to us deal with suppliers from all over the world. For a relatively small team headquartered in the North of England this means we are perhaps unusually exposed to the intricacies of global trade to a level that many large Banks probably aren’t. There are no territories or sectors that we rule out (unlike Banks!) and the core of our proposition is providing funding and technology that allows our clients to punch above their weight in terms of trading.  As our technology continues to advance it is getting easier for us, our clients and our introducers to engage with each other, which saves everyone time and money.

We’re committed to remaining the UK’s most flexible stock finance provider and we continue to invest heavily in our systems. This brings benefits to our clients across all sectors.

 

Another record month of new client facilities

 

July was another record month for us. We completed 11 new deals with total new facilities of over £1m.

Why are we busy? It’s the same reason as always. UK SME owners are world leaders in putting their shoulder to the wheel when it comes to sourcing stock from suppliers all over the world and satisfying UK consumer demand for products. Difficult times just seem to bring out the best in them.

Consumer trends move fast these days and we’ve invested heavily in our business over the last 7 years to ensure that we are not a bottleneck when it comes to quick-turn buying and selling. Our technology allows for quick decision-making and rapid deployment of funds for both new and existing client transactions. This speed also allows our clients to maximise the value of the transactions they are undertaking and it’s one of the main contributors to the growth that we are experiencing.

The best way to grow revenue is to turn orders into sales as quickly as possible. A Stock Finance facility from Seneca is a key component in delivering such growth for an increasing number of UK SMEs.

New Trade Portal App role out is continuing at pace

 

The main topic of conversation in the office recently (other than day to day stock finance) has been the next phase of our IT project, as we have been playing host to our overseas-based software development team in our office for a number of days, whilst they are on a visit to the UK.

We posted back in November that the first iteration of our bespoke client trade portal App was live and since that time we have continued to add new and existing clients onto the App. Our desktop or smart phone-based App allows clients to monitor their revolving stock finance facilities in real-time. We’ve been delighted with the engagement and enthusiasm shown towards the App by many of our clients, and we are working on a number of additional upgrades that will add even greater functionality over the coming months. After so much effort by so many people, it’s been great to see the App in action and assisting our clients with growing their businesses across all kinds of sectors.

In parallel to the client-side portal, our internal CRM system is continuing to receive big upgrades. We are now at the point where our invoicing and statement generation is fully automated. For a revolving stock finance business like ours, the time saving in terms of people-power in this area are huge, and as more time is freed up by these automations we are able to focus our human resources on the specific needs of existing and new clients, rather than being bogged down in paper work. We are now working on adding various API based plugins to allow the system to interface with a number of third party data sources, which will open up a whole new tier of functionality.  Exciting times.

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