The European market still holds sway over Asia and America when it comes to British companies doing business overseas, according to a new survey from the Institute of Directors.

43% of nearly 800 IoD members questioned reported that the biggest growth in their overseas operations over the past two years occurred in Europe, with less than half that figure claiming North America was best for overseas business growth, and a similar number choosing Asia as their business’ fastest growing overseas market.

The report reveals that the services industry is the largest single contributor to overseas exports amongst IoD member companies, and that the majority of trade was B2B, with a smaller proportion of B2C overseas trade activity, mostly focused on ecommerce.

Although Europe may currently be the most popular region for British businesses trading overseas, it seems that attitudes may be changing, with the region’s popularity receding somewhat when respondents were asked which of their overseas markets they expected to grow the most over the next five years.

Brexit to blame?

Despite the fact that 67% of survey respondents did not anticipate that Brexit would be a catalyst for ramping up trade operations in markets outside Europe, nearly one third indicated they were already in the process of stepping up engagement with alternative markets, whilst just under a quarter reported that they were planning further overseas expansion as a result of the divorce from the EU.

Amongst non-exporting firms, Europe was still seen as the natural first step for beginning overseas operations, leading the report’s author, Allie Renison, to recommend that the Department for International Trade “prioritises the EU market alongside the rest of the world in order to tap into firms not currently exporting.”

Somewhat interestingly, despite general agreement amongst respondents that government trade agreements were an essential kind of export led initiative , just 15% went on to say that they had taken advantage of a government trade agreement, suggesting a significant disconnect between government policies, and actual export-led business trends.

The IoD’s report, entitled Going Global; Trends In Trade reveals that when it comes to international trade, size still matters:

“There is a broad link between a company’s turnover and their level of international trade”, Renison writes; “56% of businesses with a turnover of £500k or less sell overseas, while 67% of firms turning over between £500k and £50m trade abroad. For those with a company turnover of above £50m, the average is far higher at 79%.”

4 out of the 5 top country markets for exporting IoD members were European, with only the US, in 3rd place, breaking the hegemony. Germany occupied the top spot, followed by France, with Ireland and the Netherlands fourth and fifth. China placed twelfth, and India fifteenth.

China was first for exporting destinations amongst Asian countries, beating India into second place, whilst in the Middle East the UAE nudged ahead of Saudi Arabia. In South America, Brazil beat Chile to top spot, and in Africa, South Africa, Nigeria and Egypt claimed the top three spots.

What the report seems to make clear is that, for financial, political, and sentimental reasons, Europe is the region British businesses feel most at ease operating in. Whilst there are signs that other regions can become more productive business partners, the scars from a “Hard Brexit” could take time to heal, resulting in decreased overseas productivity, and potentially creating a troublesome trade deficit.

In another two years time Britain will trade with the rest of Europe in a very different way; many businesses, and business leaders, however, may be hoping it’s is a case of “plus ca change…”

This content is sourced and brought to you by The Money Cloud – comparing the best rates for sending money overseas offered by hand-picked, regulated brokers and money transfer agencies.