1ST QUARTER 2014
BRITISH CHAMBERS OF COMMERCE
IN PARTNERSHIP WITH DHL
QUARTERLY
INTERNATIONAL
TRADE
OUTLOOK
THE BRITISH CHAMBERS OF
Contents
COMMERCE
The British Chambers of Commerce is the
national body for a powerful and influential
Network of Accredited Chambers of Commerce
across the UK, a Network that directly serves
not only its member businesses, but the wider
business community. Representing thousands
of businesses of all sizes and within all sectors,
the British Chambers of Commerce is the voice
of the ‘real economy’. Every Chamber sits at the
very heart of its local community working with
businesses to grow and develop by sharing
opportunities, expertise and know-how. No
other organisation makes such a difference to
business as the British Chambers of Commerce.
Foreword3
DHL/BCC Trade Confidence Index
4
Export index
5
Export & confidence balances
6
Recent performance & outlook
7
Factsheets overview
8-9
Kenya10-11
Ghana12-13
Kuwait14-15
Written and researched by:
Sukhdeep Dhillon, Global Economic Adviser
Suren Thiru, UK Economist
Tom Nolan, Policy Manager
Acknowledgements:
Mike Spicer, Director of Research
The British Chambers of Commerce
65 Petty France
St. James’s Park
London
SW1H 9EU
T: 020 7654 5800
E: [email protected]
Morocco16-17
Australia18-19
China20-21
Overview of trade agreements
22-23
Case study: ‘Our export journey’
24
How UK exports will change
25
Methodology26
www.britishchambers.org.uk
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COMPANY FOR THE WORLD
DHL is the global market leader in the logistics
industry and “The Logistics company for the
world”. DHL commits its expertise in international
express, air and ocean freight, road and rail
transportation, contract logistics and international
mail services to its customers. A global network
composed of more than 190 countries and
territories and about 275,000 employees
worldwide offers customers superior service
quality and local knowledge to satisfy their supply
chain requirements. DHL accepts its social
responsibility by supporting climate protection,
disaster management and education.
DHL is part of Deutsche Post DHL. The Group
generated revenue of more than 53 billion euros in
2011.
www.dp-dhl.com
2
About this outlook
The BCC/DHL Quarterly International Trade
Outlook sets out the opportunities and risks
facing British companies as they trade with the
world – with a particular focus on timely
information on dynamic new markets. It
features the DHL/BCC Trade Confidence Index
(TCI) which is a measure of the UK’s exporting
health. It builds on the role of accredited
Chambers of Commerce – the UK’s premier
private-sector providers of international trade
support to business – and the modelling
expertise of Oxford Economics, who have
provided all the economic and trade forecasts
presented in this publication.
Foreword
by John Longworth
Director General, British Chambers of Commerce
There has been lots of positivity around trade amongst Chamber members and customers
recently and it’s only getting better. With the UK set to be the fastest-growing major economy
this year, according to the International Monetary Fund, there is definitely a wave of optimism
in the air for British exporters. The BCC’s figures for Q1 2014 show the volume of trade
documents issued to UK exporters increased and is the second highest on record.
It is also good news that the trade deficit improved in
February and business outlook is gradually improving, the
pace is far too slow for what the economy needs. Our
Quarterly Economic Survey (QES) shows that our members
are enthusiastic about increasing their exports, but much
more needs to be done if this enthusiasm is to be reflected in
the national figures. The fact is that too many British
companies either export reactively, or shy away from doing
so because of perceived barriers, lack of local knowledge,
business contacts, or practical considerations such as a
postal address or office space.
and are confident that as they step off the plane, they can
easily be connected with new exporting opportunities. The
BCC is delighted to be working with the UK Government to
create a strong, global business-to-business network, giving
companies that haven’t exported before the tools and the
confidence to seek out opportunities in new markets across
the world.
With the right support, attitude and sheer determination,
there is no reason why the UK can’t meet the huge challenge
set by the Prime Minister of increasing exports to one trillion
by 2020.
It is crucial that business people have a quality approved,
business savvy provider of support services in new markets,
Foreword
by Phil Couchman
CEO, DHL Express UK & Ireland
The DHL/BCC Trade Confidence Index (TCI) in Q1 2014 saw increased confidence levels
amongst exporters and crucially a rise in the volume of export documentation to the second
highest level on record. This positive sentiment coupled with the Government’s increasing
support for exporters, such as the new export credit scheme, means that British businesses
are slowly being equipped with the tools they need to capitalise on the benefits of growing
their business abroad.
Looking to new markets remains key for growth, and the
Chancellor’s recent trade trip to Brazil to build business
relationships shows that this is a market with significant
opportunities for businesses. The upcoming 2014 FIFA World
Cup and 2016 Olympic Games also demonstrates a huge
investment in this territory’s infrastructure.
However, considering new markets for entry requires
detailed planning and research. There are a number of
resources available, one of which includes the DHL’s new
Export Advisors Service - a team of dedicated small business
exporting experts providing free advice for businesses,
whether they are a DHL customer or not.
The UK SMEs already growing their businesses overseas are
hugely confident in the possibilities the export market
presents. However there are still many hurdles for SMEs to
overcome such as, language differences and a lack of new
market knowledge.
If the UK is going to successfully rebalance its economy
away from consumer and Government debt, there must be
more support available for businesses who wish to export. A
great deal of work has already been undertaken to aid
businesses on their route to exporting and to keep this
success overseas marching on, we must continue to make
sure that support is readily available.
3
Q1 2014
DHL/BCC Trade Confidence Index (TCI)
The DHL/BCC Trade Confidence Index (TCI) is a measure of the UK’s exporting health. By analysing trends in
trading activity and key factors of exporting firms’ performance, the TCI gives a truly comprehensive picture of the
UK’s internationally-trading business community. The TCI is generated from two data sources: the BCC’s
Quarterly Economic Survey (Confidence Indicator) and Chamber documentation services (Volume of Export
Documentation).
EXPORT INDEX OVER THE PAST YEAR (2007 = 100)
Q1 13
Q2 13
Q3 13
Q4 13
Q1 14
114.84
118.12
116.32
112.69
117.03
Many types of exports require supporting and commercial documentation. Chambers of Commerce issue
documentation required for exports outside the EU and have amassed a significant dataset around UK
goods exports as a result. The TCI uses data collected from this process to show both an index of
documentation and regional comparisons of exporting activity. (Further details can be found in the
methodology on page 26).
CONFIDENCE INDICATOR
80
----Recession----
70
60
50
% balance
40
30
20
10
0
-10
-20
Confidence levels
-30
-40
Q3 07
Q1 08
Q3 08
Q1 09
Q3 09
Q1 10
Q3 10
Q1 11
Q3 11
Q1 12
Q3 12
Q1 13
Q3 13
Q1 14
Figure one: Balance of firms who are confident that turnover will improve over the next 12 months
Balance figures are determined by subtracting the percentage of companies reporting decreases in a factor from the
percentage of companies reporting increases.
• Confidence levels amongst exporters continued to increase on the quarter and remain high by
historical standards. Both manufacturing and service firms are more confident that their turnover
will increase over the next 12 months.
4
Export index
Q1 2014
• The volume of trade documents issued increased and is the second highest on record.
• The index number used to calculate the volume of trade documents issued by Chambers of
Commerce across the UK now stands at 117.03 in Q1 2014.
National
There was a jump in the volume of trade documents issued on the quarter. The index now stands at 117.03 in Q1 2014. This
represents an increase of 3.9% on Q4 2013, and an increase of 1.9% on the same quarter in 2013. The highest outturn on record
for this series was 118.12 in Q2 2013.
Percentage Change (%)
Volume index
of
export
documentation
Index number
2007=100
Recent quarter
compared to last year
Recent quarter on
previous quarter
117.03
1.9%
3.9%
Regions and Nations
There was a mixed picture across the regions and nations of the UK. The highest quarter-on-quarter increase was recorded in
London (+10.31%). This was followed by the West Midlands (+6.67%) and the East Midlands (+6.12%). The biggest declines were
in Northern Ireland (-10.11%) Scotland (-8.67%), and the North East (-1.80%).
Regional comparison - export index
35
Q1 2014 vs Q4 2013
30
Q1 2014 vs Q1 2013
25
% change
20
15
10
5
0
-5
-10
-15
% change in documents issued by Chambers
London
S East
N West
Scotland
Y&H
East
W Mids
E Mids
S West
N East
Wales
N Ireland
5
Export and confidence balances
Balance figures are determined by subtracting the percentage of companies reporting decreases in a factor from the percentage of
companies reporting increases.
Export orders
50
Balance of firms reporting an increase in export orders
Export orders balance increases and is now the
----Recession----
40
highest figure on record
30
• The export order balance increased by seven
points in the first quarter of 2014 to reach +43%,
20
the highest outturn on record. The previous
highest figure of +37% was recorded in Q2 2013.
% balance
10
• Further breakdown of the export orders balance
0
shows that 49% of exporters reported that their
-10
orders increased in Q1 2014, 6% of respondents
-20
said that they decreased, and 44% stated that
orders remained constant.
-30
Export Orders
-40
Q3 07
Q1 08
Q3 08
Q1 09
Q3 09
Q1 10
Q3 10
Q1 11
Q3 11
Q1 12
Q3 12
Q1 13
Q3 13
Q1 14
Export sales
50
Balance of firms reporting an increase in export sales
----Recession----
Export sales indicator is also the highest on
40
record
30
• The export sales balance increased by five
points in the first quarter of 2014 to +44%. This is
20
the highest figure ever recorded.
% balance
10
• Further breakdown of the export sales balance
0
shows that 50% of exporters reported that their
export sales increased in Q1 2014, compared with
-10
6% of respondents who said that they decreased,
-20
and 43% who claimed that orders remained
constant.
-30
Export Sales
-40
Q3 07 Q1 08 Q3 08 Q1 09 Q3 09 Q1 10 Q3 10 Q1 11 Q3 11 Q1 12 Q3 12 Q1 13 Q3 13 Q1 14
Profitability confidence
80
Percentage of firms who expect profitability to improve over the next 12 months
Exporters’ confidence that profitability will
----Recession----
improve remained high
70
• Exporters’ confidence that their profitability will
improve over the next twelve months remained
% of firms
60
high by historical standards. For the first quarter
50
of 2014 the number of firms that expect their
profitability to improve remained at 62%.
40
• Further breakdown reveals 29% of exporters
30
20
expect no change in profitability and 9% expect it
Profitability
10
Q3 07 Q1 08 Q3 08 Q1 09 Q3 09 Q1 10 Q3 10 Q1 11 Q3 11 Q1 12 Q3 12 Q1 13 Q3 13 Q1 14
6
to worsen.
Recent performance
Q1 2014
Economy
Trade
Global
Global
The US economy grew at an annual rate of 2.6% in the final
three months of 2013, an upward revision on the previous
estimate of 2.4% but below the previous quarter of 4.1%.
China, the world’s second-largest economy, grew by 7.4% in
the first quarter of 2014 compared to the same period last
year, the slowest rate of growth since Q3 2013. Eurozone
GDP growth in Q4 2013 has been revised down to 0.2% from
the previous estimate of 0.3%.
World trade declined by 0.9% in Q4 2013. Export growth
was negative in Europe and Asia during the quarter, while
North America’s export growth was positive, largely
supported by US export growth of 2.3%.
UK
The UK economy grew by 0.8% in the first quarter of 2014,
following growth of 0.7% in the final quarter of 2013. Due to
downward revisions for previous quarters, UK economic
growth for 2013 was revised down slightly to 1.7% from the
previous estimate of 1.8%. However, this was still the fastest
growth since 2010. The service sector and consumer
spending remain the main drivers of UK economic growth.
UK
The deficit in the UK’s trade balance (difference between
what we export and import) narrowed to £5.7bn in Q4 2013,
from £10bn in Q3 2013. The narrowing in the total trade
deficit was due to a fall of £3bn in the trade in goods deficit
and an increase of £1.4bn in the trade in services surplus.
Imports of goods fell £3.4bn and exports of goods
decreased by £0.4bn in Q4 2013.
However, the UK’s current account deficit (the gap between
what the UK earns and spends) reached £22.4bn in Q4 2013,
just below the all-time high of £22.8bn in Q3 2013. The deficit
was driven largely by an increase in foreign investment
earnings leaving the UK and a drop in income on British
investments abroad
Outlook
Economy
The outlook for the global economy is improving, with the recovery becoming more broad-based. Growth in the US, the UK
and Germany is strong, while emerging economies continue to enjoy robust growth albeit lower than before the crisis. There
are tentative signs that economic conditions in the Eurozone, the UK’s major trading partner, are improving slowly. However,
risks to the global recovery persist, including a slowdown in world trade growth and low inflation in advanced economies.
Trade
Global
2014
UK
EXPORTS
+2.4%
UK
IMPORTS
+2.3%
BCC forecasts
The World Trade Organisation forecast a pickup in the
volume of world trade, to 4.7% in 2014 and 5.3% in 2015.
Developed economies will grow by 3.6% and developing
economies advancing by 6.4%. Exports from Asia will grow
faster than those from any other region (6.9%). Asia should be
followed by North America (4.6%), South and Central America
(4.4%), Europe (3.3%), and other regions (3.1%) - an aggregate
that includes Africa, CIS and Middle East.
UK
The BCC forecasts that UK exports will grow by 2.4% and
imports will grow by 2.3% in 2014. In 2015, we forecast
exports will grow by 4.5% and imports by 3.7%.
The BCC forecasts a net trade balance in goods and services of
-1.4% of GDP this year, before falling slightly to -1.0% of GDP in
2016. The goods trade deficit is forecast to fall marginally, from
-6.7% of GDP in 2014 to -6.6% in 2016. The services trade
surplus will increase more substantially, from 5.1% of GDP to
5.6% over the same period.
7
Factsheets
The dynamics of the global economy have changed with a new set of fast-growing markets
challenging the position of the established advanced economies. The map below outlines
24 priority markets which are becoming more important in terms of their growth potential and
global influence. These countries have been identified to have strong growth prospects and
strategic importance for business.
Country factsheets
that will feature over the
course of 2014 reports:
88
This publication series presents facts and figures in an ‘at-a-glance’ factsheet for each
country. These factsheets are a concise resource for businesses seeking to trade, with easy-to-digest
information on the economic outlook, sector growth, trade outlook and opportunities for UK
businesses within those markets.
Please visit our dedicated international trade website to access additional information on
trade related information, and online versions of the factsheets:
www.exportbritain.org.uk
Q1
Q2
Q3
Q4
Kenya
Taiwan
Hungary
Japan
Ghana
Cambodia
Slovakia
Philippines
Kuwait
Mozambique
Kazakhstan
Algeria
Morocco
Chile
Burma
Angola
Australia
Egypt
Tanzania
New Zealand
China
India
Brazil
United States
99
Kenya
Capital: Nairobi
Largest city: Nairobi
Administrative divisions: 47 semi-autonomous counties
Currency: Kenyan shilling (KES)
Area: 581,309 km2
Population: (2012) 44,037,656
Calling code: +254
Official languages: Swahili, English
Ease of trading across borders
Importing a standard container of goods into Kenya requires
7
26
DOCUMENTS
DAYS
£1415
Source: The World Bank, Trading Across Borders: Doing Business 2013
Kenya is the biggest and most advanced economy in east and central Africa. It is east and central
Africa’s hub for financial services. Agriculture has over the years been the backbone of Kenya’s
economy. Economic prospects are positive largely because of expansions in tourism,
telecommunications, transport, construction and a recovery in agriculture. Kenya has a well-developed
social and physical infrastructure. It is considered the main alternative location to South Africa, for
businesses seeking entry into the African continent.
Economic snapshot (% annual growth rate)
2012
2013
2014-17
GDP
9.4
5.7
5.6
Export of goods and services
8.0
-2.3
12.1
Import of goods and services
-7.5
-5.7
8.0
Inflation
2.9
2.7
3.4
Exchange Rate (Per £)
133
128
139
Population
2.8
2.7
2.6
Source: Oxford Economics
Economic outlook
Trade outlook
Despite the impact of the very sluggish EU economy on Kenya’s
exports and tourism, rising agricultural output and foreign direct
investment inflows kept GDP growth at 4.6% in Q1-Q3 last year.
Activity continues to be led by construction, electricity and
water, financial services and manufacturing. Growth of 5.5% in
2014 is expected, as tourism recovers and agricultural output
rises. And with investor interest in Africa rising and east African
trade opportunities expanding, growth of around 6% in both
2015 and 2016 is expected.
As a member of the integrated east African community,
Kenya’s external performance will also depend on the growth
rate of east African countries, especially Uganda and
Tanzania with whom Kenya has significant trade ties. These
blocs are a key components of Kenya’s trade volumes.
Kenya’s imports include machinery, transport equipments
and motor vehicles. India and the UAE are the largest import
partners for Kenya. Other major import partner countries are
China, Saudi Arabia, South Africa, Japan and the US.
SWOT analysis
10
Strengths
Well diversified economy, providing a strong base for
weathering problems in any one industry.
Weaknesses
Inadequate infrastructure.
Opportunities
Strategic position.
Emerging middle class.
Threats
Agricultural production highly dependent on weather
conditions.
Kenya’s trade with the UK
UK exports to Kenya (2013) - by major product groups
How Kenya’s imports from the UK compare
UK
Europe
Asia
North America
80
Food, beverages & tobacco
13%
Crude materials & fuel
Chemicals and related products
Manufactured goods
16%
61%
achinery and transport
M
equipment
Commodities
70
% of total imports of Kenya
4% 4%
60
50
40
30
20
10
(Total value £379m)
0
2011
Source: Eurostat
2012
2013
2014
2015
2016
2017
2018
2019
2020
Source: Oxford Economics
DHL Express Customs Top Tips:
Kenya
De minimus value (duty free allowance) = USD 10.
Customs require values to be stated in the same currency on the waybill and commercial invoice.
Pro-forma invoices are not accepted. Commercial invoices must be in English on official headed paper.
Sector segmentation growth
Forecast for Africa’s economic structure (2021) Output, value-added, real, % of GDP
14%
2%
4%
Agriculture, forestry & fisheries
Construction
6%
26%
Financial & business services
Industrial production,
excluding construction
Information & communications
16%
Sectors to watch:
•
•
•
•
Financial and business services
Industrial production
Manufacturing
Infrastructure
Manufacturing
5%
27%
Source: Oxford Economics
Public services
Retails & wholesale distribution
Opportunities for UK businesses
Kenya has a central role in east Africa as the largest economy and a gateway into the region.
Opportunities for UK businesses exist in largely in the services sector (tourism, banking,
telecommunications, wholesale and retail trade, and business process outsourcing). Kenya envisages a
massive upgrading and extension of the country’s infrastructure. In this regard, the country has
highlighted a number of infrastructure projects that present significant opportunities for UK
businesses in the coming years.
11
Ghana
Capital: Accra
Largest city: Kumasi
Administrative divisions: 10 administrative regions
Currency: Ghana cedi (GHS)
Area: 238,535 km2
Population: (2012) 24,200,000
Calling code: +233
Official language: English
Ease of trading across borders
Importing a standard container of goods into Ghana requires
7
34
DOCUMENTS
DAYS
£786
Source: The World Bank, Trading Across Borders: Doing Business 2013
Ghana has one of largest economies on the African continent and one of the world’s fastest growing
economies. It is a mixed economy and an emerging market with 7.9% GDP growth in 2012. An
economic plan target known as the “Ghana Vision 2020” aims to see Ghana become the first country
on the African continent to become a developed country from the years 2020 to 2029 followed by a
newly industrialised country from the years 2030 to 2039.
Economic snapshot (% annual growth rate)
2012
2013
2014-17
GDP
7.9
4.8
5.6
Export of goods and services
9.5
-4.1
10.9
Import of goods and services
15.7
-4.4
9.4
Inflation
Exchange Rate (Per £)
Population
9.2
11.7
8.8
2.83
2.94
3.61
2.3
2.3
2.2
Source: Oxford Economics
Economic outlook
GDP is now estimated to have risen by 4.8% in 2013 overall,
lower than previously expected. The main weakness was due
to routine maintenance at the Jubilee oilfield, which saw
mining output fall sharply. Although services are still
growing strongly and oil output will bounce back, growth is
now estimated at 6% this year, before a modest easing to
some 5.5-6% per annum in 2015-16.
Trade outlook
Ghana remains heavily dependent on international financial
and technical assistance. Because of historical connections
to Europe and geographical proximity, European exports
have tended to be relatively more successful in Ghana. Other
than the EU, the largest import partners for Ghana include,
United Arab Emirates (16%), China (12%), India (5.2%), US
(4.3%), and France (4.1%). Ghana largely exports to South
Africa (20%), France (12%), Netherlands (6.9%), United Arab
Emirates (6.7%), and US (6%).
SWOT analysis
12
Strengths
Government has introduced trade policy reforms to promote
growth and provide transparent regulatory practices to
attract foreign investments.
Weaknesses
Ballooning fiscal deficit is at 14.5% of GDP.
High inflation.
Opportunities
Infrastructure development.
Threats
Overdependence on gold output, vulnerable to fluctuations
and plummeting prices of gold.
Ghana’s trade with the UK
UK exports to Ghana (2013) - by major product groups
How Ghana’s imports from the UK compare
UK
Crude materials & fuel
17%
hemicals and related
C
products
Manufactured goods
15%
Machinery and transport
equipment
Commodities
20%
(Total value £373m)
Source: Eurostat
% of total imports of Ghana
Food, beverages & tobacco
38%
Rest of Europe
Asia
North America
60
10%
50
40
30
20
10
0
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Source: Oxford Economics
DHL Express Customs Top Tips:
Ghana
De minimus value (duty free allowance) = 0 All shipments are subject to duty and taxes.
All shipments are subject to a formal declaration and Customs clearance, regardless of value.
This includes a destination inspection by a Government Authorised Inspection Agency.
Ghana’s Ministry of Trade requires many electronic items, perishables, toys and alcohol to be shipped
with a Certificate of Analysis/Conformance to confirm safety and will be inspected before they are
cleared through Customs.
Sector segmentation growth
Forecast for Africa’s economic structure (2021) Output, value-added, real, % of GDP
14%
2%
4%
Agriculture, forestry & fisheries
Sectors to watch:
Construction
• Financial and business services
• Industrial production
• Manufacturing
Financial & business services
6%
26%
Industrial production,
excluding construction
Information & communications
16%
Manufacturing
Public services
5%
27%
Retails & wholesale distribution
Source: Oxford Economics
Opportunities for UK businesses
Ghana has a population of about 24.2 million people and is one of the most populous countries in
West Africa, second only to Nigeria. Ghana has become increasingly attractive to foreign investors. UK
businesses can seek opportunities in the services sector. The country requires management level
education facilities (i.e., nursing, finance, etc) to meet the growing need in the country’s private sector.
Other sectors of opportunity include, healthcare, information and communications technology
services.
13
Kuwait
Capital: Kuwait City
Largest city: Kuwait City
Administrative divisions: 5 districts
Currency: Kuwaiti dinar (KWD)
Area: 17,820 km2
Population: (2012) 3,965,022
Calling code: +965
Official language: Arabic
Ease of trading across borders
Importing a standard container of goods into Kuwait requires
10
19
DOCUMENTS
DAYS
£739
Source: The World Bank, Trading Across Borders: Doing Business 2013
Kuwait is a small, relatively open economy. The Kuwaiti currency is the highest-valued currency unit in
the world. 57% of Kuwait’s GDP comes from non-oil industry (mostly business services,
manufacturing, retail trade, financial institutions, construction, transport and real estate). Kuwait has
one of the oldest and most financially stable economic systems in the Middle East, with a stock
exchange which dates back over 50 years and a well-developed banking system. Other major
industries include real estate, shipping, construction, cement, water desalination, construction
materials and financial services.
Economic snapshot (% annual growth rate)
GDP
2012
2013
2014-17
8.3
3.5
3.9
Export of goods and services
2.1
2.5
2.9
Import of goods and services
-13.2
11.0
7.2
2.9
2.7
3.4
0.44
0.42
0.40
2.5
2.4
2.2
Inflation
Exchange Rate (Per £)
Population
Source: Oxford Economics
Economic outlook
GDP growth is estimated to have slowed to 3.5% in 2013
from 8.3% in 2012, with oil output rising by just 0.6%. Overall
GDP growth is set to remain relatively modest in the short to
medium term given marginal growth in oil production due to
capacity constraints – the result of persistent
underinvestment – and the rise in non-OPEC supply. GDP is
forecast to grow by 3.7% in 2014 and 4% in 2015, only slightly
above the 3.5% growth rate estimated for 2013.
SWOT analysis
Strengths
Developed port infrastructure.
World’s sixth most attractive tax regime.
Opportunities
Strategically located in the northern Arabian Gulf bordering
three major markets of Saudi Arabia, Iraq and Iran.
14
Trade outlook
Kuwait imports most of its capital equipment, processed foods
manufacturing equipment, and consumer goods. Two-way
trade is limited to a few international partners. A high
percentage of imports originate from the U.S., Germany and
Japan, while over 40% of Kuwait’s export earnings is
attributable to Japan, South Korea, India, and the US.
Weaknesses
Administrative and bureaucratic delays in setting up a new
business, sponsorship or agency.
Threats
Highly volatile GDP due to dependence on oil prices.
Kuwait’s trade with the UK
UK exports to Kuwait (2013) - by major product groups
How Kuwaits’s imports from the UK compare
Rest of Europe
UK
Asia
North America
50
7%
Crude materials & fuel
Chemicals and related
products
56%
Manufactured goods
23%
achinery and transport
M
equipment
Commodities
% of total imports of Kuwait
Food, beverages & tobacco
14%
40
30
20
10
(Total value £479m)
0
2011
Source: Eurostat
2012
2013
2014
2015
2016
2017
2018
2019
2020
Source: Oxford Economics
DHL Express Customs Top Tips:
Kuwait
De minimus value (duty free allowance) = 0.
All shipments to Kuwait must have an original, detailed, commercial or pro-forma invoice that clearly
states the country of manufacture. It must be stamped by the shipper. Any shipment valued above USD
3000, including insurance and shipping charges, or above 100kgs, must have an original Certificate Of
Origin (COO) that has been issued by a Chamber of Commerce at origin. The COO must include the
invoice number and all details on COO and invoice must match.
Sector segmentation growth
Forecast for Kuwait’s economic structure (2021) Output, value-added, real, % of GDP
6%
4% 2%
8%
6%
22%
Agriculture, forestry & fisheries
Sectors to watch:
Construction
•
•
•
•
Financial & business services
Industrial production,
excluding construction
Information & communications
Garments
Utilities
Telecommunications
Machinery and other chemicals
Manufacturing
Public services
Retails & wholesale distribution
Source: Oxford Economics
52%
Opportunities for UK businesses
Kuwait is situated in the northwestern corner of the Arabian Peninsula, at the head of the Arabian Gulf,
occupying a strategic position in this vital region. Kuwait is undergoing significant expansion in the
building and construction industry. The Government of Kuwait is currently involved in a $104m
development plan that includes the construction of major roadways, a new container terminal and
infrastructure to support northward bound transportation. Further opportunities for UK businesses
exist in sectors of automotive, oil and gas, computers/ITC, telecommunications equipment and
construction.
15
Morocco
Capital: Rabat
Largest city: Casablanca
Administrative divisions: 16 regions
Currency: Moroccan dirham (MAD)
Area: 446 550 km2
Population: (2012) 33,304,400
Calling code: +212
Official language: Arabic
Ease of trading across borders
Importing a standard container of goods into Morrocco
requires
8
16
DOCUMENTS
DAYS
£572
Source: The World Bank, Trading Across Borders: Doing Business 2013
Morocco’s economy is a diverse, open, market-oriented economy. The services sector accounts for
just over half of the economy and industry, made up of mining, construction and manufacturing,
makes up a further quarter. Industrial development strategies and infrastructure improvements - such
as the new port and free trade zone near Tangier - are improving Morocco’s competitiveness. Despite
Morocco’s economic progress, the country suffers from high unemployment, poverty, and illiteracy,
particularly in rural areas.
Economic snapshot (% annual growth rate)
2012
2013
2014-17
GDP
2.7
4.4
4.6
Export of goods and services
2.7
-3.2
12.0
Import of goods and services
2.0
-2.0
8.9
1.2
1.9
2.3
Inflation
Short-Term interest rates*
Exchange Rate (Per £)
Population
3.2
3.4
3.9
13.61
12.51
12.62
1.0
1.0
0.9
*Actual average rate
Source: Oxford Economics
Economic outlook
Despite the impact of the recession in Europe on trade and
tourism on Morocco, GDP growth in Morocco picked up to
an estimated 4.4% in 2013. A modest slowdown is likely this
year, to just under 4%, as the impact of agricultural recovery
fades, but growth is then expected to return to around 5% in
2015.
SWOT analysis
16
Trade outlook
Morocco has the second-largest non-oil economy in the Arab
world. In the past, Morocco relied on phosphate exports, which
has declined over the recent years. The country has now
emerged as an exporter of manufactured and agricultural
products and its popularity as a tourist destination is growing.
Morocco’s primary trade partner continues to be France
(16.1%). Morocco’s other import partners include; Spain (13.5%),
Italy (6.5%), China (6%), Germany (5.6%), Saudi Arabia (5.4%)
and Moldova (5%).
Strengths
A well developed communication network and transport
connections.
Weaknesses
Corruption.
Low living standards.
High unemployment rate.
Opportunities
Preferred foreign direct investment destination among
African nations.
Threats
Morocco’s tight commercial links with Europe leave the
country highly susceptible to developments in Europe.
Morocco’s trade with the UK
UK exports to Morocco (2013) - by major product groups
How Morocco’s imports from the UK compare
UK
Rest of Europe
Asia
North America
Food, beverages & tobacco
Crude materials & fuel
27%
41%
C
hemicals and related
products
Manufactured goods
achinery and transport
M
equipment
Commodities
21%
(Total value £598m)
7%
Source: Eurostat
% of total imports of Morocco
60
1% 3%
50
40
30
20
10
0
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Source: Oxford Economics
DHL Express Customs Top Tips:
Morocco
De minimus value (duty free allowance) = 0.
Pro-forma invoices are not accepted by Customs.
If sending Textiles, reference prices will be applied by Customs regardless of declared value. The
composition of the fabric must be specified. If sending samples, mutilate and clearly mark as samples
on the commercial invoice to ensure duties and taxes are not applied.
If the goods origin of manufacture is UK, then duty preference can be claimed by providing a EUR1
certificate stamped by Customs. British Chambers in the UK act as issuing bodies authorised by the HM Revenue &
Customs (HMRC) for preference documents such as EUR1’s and A.TR certificates.
Sector segmentation growth
Forecast for Africa’s economic structure (2021) Output, value-added, real, % of GDP
14%
2%
Agriculture, forestry & fisheries
4%
Construction
Financial & business services
6%
26%
Industrial production excl.
construction
Sectors to watch:
• Financial services
• Business services
• Manufacturing
Information & communications
16%
Manufacturing
Public services
5%
27%
Retail & wholesale distribution
Source: Oxford Economics
Opportunities for UK businesses
Morocco is situated in the north west of Africa and has a unique & strategic position. Morocco enjoys
financial stability and economic reform is firmly on the Government’s agenda. UK businesses can
benefit from the opportunities opening up through Free Trade Agreements and take advantage of
Morocco’s position as a gateway to Africa and the Middle East. The following sectors have been
identified as best prospects for UK businesses: water management, construction and renewable
energy.
17
Australia
Capital: Canberra
Largest city: Sydney
Administrative divisions: 6 states and 2 mainland territories
Currency: Australian dollar (AUD)
Area: 7,692,024 km2
Population: (2012) 23,442,761
Calling code: +61
Official language: English
Ease of trading across borders
Importing a standard container of goods into Australia requires
7
8
DOCUMENTS
DAYS
£697
Source: The World Bank, Trading Across Borders: Doing Business 2013
Australia has one of the strongest, most open and flexible economies in the world. It is the world’s
sixth-largest country by total area. The Australian economy is dominated by its service sector,
comprising 68% of economic output. Recent economic growth has largely been dependent on the
mining sector and agricultural sector with the products exported mainly to the east Asian market. The
Australian economy has experienced continuous growth and features low unemployment, contained
inflation, very low public debt, and a strong and stable financial system. Australia has benefited from a
dramatic surge in its terms of trade in recent years, stemming from rising global commodity prices.
Economic snapshot (% annual growth rate)
2012
2013
2014-17
GDP
3.6
2.4
2.9
Export of goods and services
5.8
6.8
6.0
Import of goods and services
6.1
-2.8
3.6
Inflation
1.8
2.4
2.8
Short-Term interest rates*
3.2
2.6
4.5
Exchange Rate (Per £)
1.52
1.54
1.61
Population
1.0
1.0
1.0
Unit labour cost
2.3
0.2
1.8
*Actual average rate
Source: Oxford Economics
Economic outlook
The economy grew slightly faster than expected at the end
of 2013, recording growth of 0.8% in Q4 2013. Stronger
export volumes helped net exports to contribute a solid 0.6
percentage points to growth, but private domestic demand
remained subdued, with improving consumer spending
offset by a fall in private capital expenditure. GDP growth is
expected to rise modestly to 2.9% in 2014 and 2015, from
2.4% last year.
Trade outlook
Asia will remain Australia’s key export market, China followed
by Japan, Korea and India will be the largest export markets.
Unprecedented mining investments means that Australia is
well placed to meet the rapidly growing needs of emerging
economies for energy over the next couple of decades.
SWOT analysis
18
Strengths
Increasing global appetite for energy and commodities
places Australia in a strong trade position.
Weaknesses
Dependent on China for exports.
High amount of external debt.
Opportunities
A sizeable domestic market.
Threats
Slowing productivity growth.
Australia’s trade with the UK
UK exports to Australia (2013) - by major product groups
Food, beverages & tobacco
8%
1%
Crude materials & fuel
21%
43%
C
hemicals and related
products
Manufactured goods
achinery and transport
M
equipment
Commodities
Asia
North America
50
40
30
20
10
(Total value £3.5bn)
26%
Rest of Europe
UK
60
% of total imports of Australia
1%
How Australia’s imports from the UK compare
0
2011
Source: Eurostat
2012
2013
2014
2015
2016
2017
2018
2019
2020
Source: Oxford Economics
DHL Express Customs Top Tips:
Australia
De minimus value (duty free allowance) = AUD 1000.
New clothing and other textiles should be clearly marked ‘NEW’ on the waybill and invoice. This will
help prevent Customs delays, as used textiles are subject to quarantine and fumigation requirements.
The shipping charge should be quoted on the invoice in addition to the customs value, otherwise a
standard local customs freight charge is applied by AU customs for Goods & Service Tax calculations.
Sector segmentation growth
Forecast for Australia’s economic structure (2021) Output, value-added, real, % of GDP
9%
3%
Agriculture, forestry & fisheries
9%
Construction
6%
Financial & business services
9%
Industrial production excl.
construction
3%
32%
Information & communications
Manufacturing
Sectors to watch:
•
•
•
•
•
Food
Utilities
Non-ferrous metals
Ceramics
Clay & refractory products
Public services
29%
Retail & wholesale distribution
Source: Oxford Economics
Opportunities for UK businesses
Australia is one of the largest economies in the Asia Pacific region after Japan, China and Korea. The
combination of a highly-qualified work force, extensive infrastructure and natural resources are the
reasons why many businesses, both small and large, are exploring Australia. The system of law in Australia
is historically dependent for its legal validity on British statutes, notably including the Commonwealth of
Australia Constitution Act 1900. Australia offers UK businesses many opportunities, especially in the
following sectors: agribusiness and food, major infrastructure, resources and energy, advanced
manufacturing, services and technology.
19
China
Capital: Beijing
Largest city: Shanghai
Administrative divisions: 34 divisions
Currency: Renminbi (yuan) (¥) (CNY)
Area: 8,514,877 km2
Population: (2012) 1,353,821,000
Calling code: +86
Official languages: Mandarin, Chinese
Ease of trading across borders
Importing a standard container of goods into China requires
5
24
DOCUMENTS
DAYS
£383
Source: The World Bank, Trading Across Borders: Doing Business 2013
The UK is one of Europe’s largest investors in China, and among the largest destinations in Europe for
China’s outward investment. With a population of 1.3 billion, China is the second largest economy and
is increasingly playing an important and influential role in the global economy. China’s success has
been primarily due to manufacturing as a low-cost producer. This is attributed to a combination of
historically cheap labour, good infrastructure, relatively high productivity and favourable Government
policy.
Economic snapshot (% annual growth rate)
2012
2013
2014-17
GDP
7.7
7.7
7.0
Export of goods and services
3.2
6.5
7.4
Import of goods and services
4.2
8.8
8.8
Inflation
2.6
2.6
2.7
Short-Term interest rates*
4.6
5.0
5.3
Exchange Rate (Per £)
9.96
9.21
8.76
Population
0.6
0.6
0.6
Unit labour cost
8.6
9.8
6.0
*Actual average rate
Source: Oxford Economics
Economic outlook
China’s economy expanded at an annualised rate of 7.4% in
the first quarter of 2014. The process of rebalancing China’s
economy and weaning it off high credit growth is going to be
more challenging. Consumer spending should outpace
investment over the next five years as the Government seeks
to rebalance the economy. But consumption will also be
affected as loan availability is reduced. Growth is set to slow
to 6.8% in 2015.
Trade outlook
Growth in Chinese exports is expected to be faster than other
economies in Asia over the medium term. Chinese exporters
will begin to target new markets for their products in other
emerging economies. Export prospects amongst the
developed economies appear far more restrained, with the
share of exports to Europe expected to decline. The US
economy continues to represent the most important market
for Chinese exporters in terms of its absolute size. In terms of
imports, the rest of Asia remains the largest with a quarter of
total Chinese imports.
SWOT analysis
20
Strengths
World’s second largest economy.
High population.
World’s second-largest trading power.
Weaknesses
Corruption.
Opportunities
Consumption boom.
Middle class population growth.
Threats
High inflation.
Financial reforms.
China’s trade with the UK
UK exports to China (2013) - by major product groups
How China’s imports from the UK compare
Food, beverages & tobacco
13%
Crude materials & fuel
12%
C
hemicals and related
products
Manufactured goods
achinery and transport
M
equipment
61%
11%
Rest of Asia
North America
35
% of total imports of China
1% 2%
Rest of Europe
UK
40
Commodities
30
25
20
15
10
5
(Total value £10.75bn)
0
2011
Source: Eurostat
2012
2013
2014
2015
2016
2017
2018
2019
2020
Source: Oxford Economics
DHL Express Customs Top Tips:
China
De minimus value (duty free allowance) = CNY 50 - If calculated duty/tax is under 50 CNY then the
shipment is classed as duty free.
China only allows commercial shipments to be sent to a business, and the receiver name, postcode and
phone number must be provided. All shippers/receivers must be registered with Chinese Customs and
are given a Customs Registration (CR) number. Ensure your customer’s CR number is stated on your
pro-forma/commercial invoice and on any applicable Customs declarations to avoid delays.
Shipments under 794 USD can clear as informal as long as the paperwork provides a detailed description.
Sector segmentation growth
Forecast for China’s economic structure (2021) Output, value-added, real, % of GDP
10%
5%
Agriculture, forestry & fisheries
5%
Construction
4%
10%
Financial & business services
Industrial production excl.
construction
Sectors to watch:
•
•
•
•
Iron & steel
Utilities
Electronic components
Machinery
Information & communications
27%
Manufacturing
37%
2%
Public services
Retail & wholesale distribution
Source: Oxford Economics
Opportunities for UK businesses
China will remain an important and viable market for a wide range of products and services. As a
result, China offers huge opportunities for UK businesses, particularly in sectors such as food and
drink, renewable energy and financial services. The opportunities are not just in the well-known
Chinese business centres of Beijing, Shanghai, Guangzhou and Shenzhen, but also in numerous
emerging regional centres such as Chengdu, Sichuan, Chongqing, Dalian, Liaoning and Hangzhou.
21
Overview of trade agreements
Source: European Commission
EU and Customs union:
Andorra - Monaco - San Marino - Turkey - French Guiana
European Economic Area:
Norway - Iceland - Liechtenstein
Countries with which the EU has concluded preferential trade agreements:
Mexico - Chile - Colombia - Peru - Costa Rica - El Salvador - Guatemala - Nicaragua - Honduras - Morocco - Algeria Tunisia - Egypt - Jordan - Israel - Occupied Palestinian Territory - Lebanon - Syria - Macedonia - Albania - Serbia Montenegro - Bosnia-Herzegovina - Croatia - Switzerland - South Africa - Republic of Korea (South Korea) - Antigua* &
Barbuda* - Belize* - Bahamas* - Barbados* - Dominica* - Dominican Republic* - Granada* - Guyana* - Haiti* - Jamaica*
- Papua New Guinea* - St Kitts and Nevis* - St Lucia* - St Vincent and the Grenadines* - Seychelles* - Suriname* Trinidad and Tobago*
22
22
Countries with which the EU is currently negotiating preferential trade agreements:
Canada - India - Singapore - Malaysia - Ukraine - Brazil - Argentina - Uruguay - Paraguay - Saudi Arabia - Botswana* Cameroon* - Côte d’Ivoire* - Kuwait - Qatar - United Arab Emirates - Fiji* - Oman - Bahrain - Libya - Cook Islands* - Kiribati
- Lesotho* - Swaziland* - Madagascar* - Mauritius* - Mozambique* - Marshall Islands* - Micronesia* - Nauru* Samoa* - Solomon Islands* - Timor Leste* - Tonga* - Tuvalu* - Vanuatu* - Angola* - Namibia* - Comoros* - Djibouti* Eritrea* - Ethiopia* - Malawi* - Sudan* - Zambia* - Burundi* - Kenya* - Rwanda* - Uganda* - Tanzania* - Central African
Republic* - Chad* - Congo* - Democratic Republic of Congo* - Equatorial Guinea* - Gabon* - Sao Tome and Principe* Benin* - Burkina Faso* - Cape Verde* - Gambia* - Ghana* - Guinea* - Guinea-Bissau* - Liberia* - Mali* - Mauritania* - Niger*
- Nigeria* - Senegal* - Sierra Leone* - Togo* - Zambia* - Zimbabwe* - Vietnam - Moldova - Armenia - Georgia - United
States of America - Japan
Countries with which the EU is considering opening preferential negotiations:
Azerbaijan - Brunei - Indonesia - Philippines - Thailand - Ecuador - Bolivia
*Economic partnership agreements
23
23
Case study: ‘Our export journey’
Accredited Chambers of Commerce are Britain’s export hubs. Chambers of
Commerce are the premier source of private sector, business-to-business support
for international trade and export. In addition to in-house support, Chambers also
partner with government agencies such as UKTI, to ensure companies get the best
possible advice and help. And it’s working. Amongst Chamber members, 22% were
exporting in 2011 - compared to over 35% today.
This section brings together the experiences of businesses who have embarked on their export journey. It gives a snapshot of
some of the challenges they faced when trying to expand their business’s share of exports or enter new markets.
Smiffy’s
Founded in 1894, Smiffy’s
has become a global
organisation with offices
and showrooms worldwide.
As the leading fancy dress,
Halloween and carnival
manufacturing company in
the UK, Smiffy’s distribute
nearly 5,000 products to
over 5,000 stockists around
the world with over 26
million items shipped every
year.
Member of Lincolnshire Chamber of Commerce
Trading internationally
FUN is the name of the game for staff at Smiffy’s,
where they are knee-deep in crazy colourful
costumes, wild wigs and amazing accessories and
pack and despatch more than 75,000 products
every day of the year.
But this Gainsborough company is deadly serious
about exporting. Overseas sales to 42 countries
make up almost £18m of its £50m turnover. Head
of International Development Julian Smith said:
‘Exporting is a massive growth area. Over the past
four years, overseas sales have risen from around
10 to 35 per cent of turnover. This will continue to
increase as we expand our international horizons.’
Two factors are at play. Smiffy’s has great products
and is absolutely dedicated to the development of
innovative ranges, backed by trusted quality and
service. The company has also entered completely
new markets, experiencing a huge surge in
demand - particulary from Europe, thanks to
changing social trends.
Exporting tip
Be visible and develop local strategies: The
company has agency and distribution partners
across the globe – from The Netherlands to
Italy, Australia, Canada and America - but has
taken a strategic step and put directly-employed
staff into overseas territories. “It’s like having an
extension of our management team. It makes
Smiffy’s more visible, allows us to develop
localised strategies to meet individual market
needs and ensures we can more efficiently
follow-up sales” said Julian.
Smiffy’s is determined to maximise opportunities,
but as it expands into more challenging markets,
the business faces increasingly tough decisions
as directors weigh-up the benefits of speculative
development against consolidation and focus on
existing core territories.
To find out how your local Accredited Chamber can help you on your export journey, visit www.exportbritain.org.uk or
join the conversation on Twitter: get #wellconnected and #joinyourchamber.
24
How UK exports to the world will change in the next 10 years
UK exports in 2012
US$0-999
(Millions)
US$1,000-4,999
US$5,000-9,999
US$10,000-49,999
US$50,000+
Source: Oxford Economics
UK exports in 2021
25
TCI Methodology
The TCI generates its results from two data sources:
• Questionnaire responses submitted by over 2,000 exporters, derived from the BCC’s Quarterly Economic Survey
(QES). The QES is the largest and most representative private sector business survey of its kind.
• Data generated from exporting activity that requires supporting documentation.
Quarterly Economic Survey (QES)
Fieldwork for the survey was conducted between 24 Febuary to 19 March 2014.
Results are split into the following firm size categories:
0-9 employees (micro firms)
10-49 employees (small firms)
50-249 employees (medium firms)
50+ employees (large firms)
Unless otherwise stated, results refer to all exporters responding to the survey. Where results are split between the
service and manufacturing sectors, this is stated clearly in the text. Results that are not split by firm size are weighted by
the contribution of firm size to total exporting turnover.
Results are represented by either a balance figure or a pure percentage figure. Balance figures are determined by
subtracting the percentage of companies reporting decreases in a factor from the percentage of companies reporting
increases. Where a balance figure is positive it represents growth; where it is negative, it represents contraction.
Export documentation data
Many types of exports require supporting and commercial documentation to ensure the timely delivery of goods and
timely payment. Accredited British Chambers of Commerce administer documentation required for exports outside the
EU and have amassed a significant dataset around UK goods exports as a result. The TCI uses data collected from this
process to show both an index of documentation and regional comparisons of exporting activity.
Oxford Economics
The Quarterly International Trade Outlook also draws upon the modelling expertise of Oxford Economics, who have
provided all the economic and trade forecasts presented in this publication.
Oxford Economics was founded in 1981 to provide independent forecasting and analysis tailored to the needs of
economists and planners in government and business. It is now one of the world’s leading providers of economic
analysis, advice and models, with over 300 clients including international organisations, government departments and
central banks around the world, and a large number of multinational blue-chip companies across the whole industrial
spectrum.
26
BRITISH CHAMBERS OF COMMERCE
65 PETTY FRANCE
LONDON SW1H 9EU
UNITED KINGDOM
T +44 (0)20 7654 5800
E [email protected]
www.britishchambers.org.uk