More UK businesses are relying on international markets to grow their sales, as they face tougher economic conditions at home and post-Brexit trade barriers, a survey has found.
More than a quarter of firms who have taken their businesses to markets overseas now expect more than half their revenue to come from abroad in the year ahead, according to Santander UK’s trade barometer.
That is more than double the amount who said so two years ago.
Meanwhile, 28% of UK businesses said they are considering international expansion in the next three years, the highest level in two years of the survey.
More than 1,000 firms with at least £1 million annual turnover were surveyed by the bank.
Jane Galvin, head of corporate clients for Santander UK, said the findings indicate a “realisation for UK businesses that, actually, in order to achieve growth, they have got to look for international markets and partly that will be because of the economic environment we’re seeing here in the UK”.
The UK dipped into a recession at the end of last year, according to official growth figures, amid sluggish growth and interest rates at the highest level for more then a decade.
Inflation has fallen sharply over the past year but cost pressures remain one of the biggest threats for businesses, with wage pressures pushing up staff costs and higher electricity prices continuing to bite.
Ms Galvin added that Brexit and increased regulation was likely to be a factor behind businesses’ decisions to look to regions such as the US and Australia as a “first port of call” when it comes to international expansion.
More than one third of businesses said they would like to receive more help from the Government with reducing regulatory requirements and bureaucracy overseas.
“Bureaucratic challenges are amongst the biggest barriers to international trade for businesses large and small, and there is a clear demand from companies for help to overcome this, so they can drive their international growth ambitions,” Ms Galvin said.
Meanwhile, the research showed that firms were thinking about moving their supply chains closer to the UK amid heightened geopolitical tensions, disruption across key shopping routes in the Red Sea, and higher costs.
Some 38% of firms said they already had plans to transfer production closer to home.