Cautious optimism as business confidence strengthens in wake of improved performance over past year, according to latest Santander Trade Barometer

  • UK businesses trading internationally are performing better than those limited to domestic trade, according to the latest Santander Trade Barometer
  • Rising costs have the greatest influence of any factor over future business growth, according to 75% of businesses surveyed
  • Businesses move to diversify supply chains and bring them closer to home
  • The EU reclaims place as number one region for international growth opportunities, and India overtakes China among Asian markets


UK businesses that trade internationally are outperforming those limited to domestic trade, according to the latest Santander Trade Barometer published today1. Despite economic headwinds, 59% of companies that trade internationally report improved performance over the past year compared to just 46% of those which do business solely in the UK. 

This resilience has enhanced business confidence in growth over the coming three years to reach 76% - up from 70% recorded in autumn 20222. However, businesses are wary of rising costs (cited by 75% of companies), which they believe have the greatest influence on whether they will grow or stall over the next three years.

John Carroll, Head of International & Transactional Banking, Santander UK said: “The Santander Trade Barometer points to international trade as a significant growth driver and the fastest route to recovery for businesses that have been up against challenge after challenge in recent years and we are delighted to have supported over a thousand businesses into a new market overseas since 2019.” 

Labour market pressures and recruitment issues
Among the biggest influences on businesses’ ability to grow over the next three years is their ability to attract skilled staff (cited by 70%). The spring Trade Barometer reveals businesses have faced a host of staffing issues over the past six months, including higher starting salaries (56%), more staff vacancies than usual (54%) and Brexit-induced staff shortages (47%). In line with this, recruitment and training feature top of businesses’ investment plans for the next year, with 46% planning to hire new staff and 40% putting funds into staff training. 

Supply chain diversification
Transport costs present the greatest challenge to doing business overseas (cited by 38%) and form the number one barrier to domestic companies attempting to take their business international (41%). Meanwhile, businesses are seeking to bring their supply chains closer to home, with 41% taking measures to do so. Of the 40% of firms with China at the centre of their supply chain, more than half (56%) plan to reduce their dependency on it. However, the sectors whose supply chains are most reliant on China – retail/wholesale (70%) and manufacturing (57%) – have the least intention of completely diversifying their supply chains away from China, with just 3% of retail/wholesale businesses and 12% of manufacturing firms planning to do so. 

International market developments
For international growth opportunities, the EU has reclaimed its place as the leading region for growth opportunities (cited by 46%), having slipped to second spot in autumn 2022.  This is despite a host of persistent obstacles to trade caused by Brexit (cited by 41%), bureaucracy (36%), and transport costs (28%). 

On a country basis, the US continues to lead for growth opportunities (cited by 35%), having been top country since autumn 2021. The nation is particularly strong in providing opportunities for trade with UK telecommunications, media and technology (TMT) companies, which may have contributed to the sector coming out top of all industries in terms of its confidence in growth over the next three years (89%).

India (cited by 16%, up from 12% in autumn 2022) has overtaken China (11%, down from 15% in autumn 2022) to become the top market among Asian countries for international growth opportunities. Among all countries, India ranks 6th, ahead of China (13th), Japan (16th), and Singapore (17th).

John Carroll, Head of International & Transactional Banking, Santander UK added: “The two international markets to watch are India and the EU. India’s economy is thriving, largely due to its ‘Make in India’ manufacturing policy reforms and its role in supply chain diversification. With strong technology and engineering talent, India will play a strategic role in many UK businesses’ global operations and innovation capabilities. As for trade with the EU, the Windsor Framework brings clarity for businesses and goods moving between the UK and the Republic of Ireland, and opens the door for UK ascension to CPTPP (the Comprehensive and Progressive Agreement for Trans-Pacific Partnership) and other free trade agreements.”

Recovery opportunities
Businesses are looking to international trade as a means of economic recovery. More than a third (38%) perceive international growth as the way out of current economic challenges, and 65% believe international markets have greater growth potential than that of the UK. Additionally, 36% say the current economic conditions have made overseas markets more important to their business.

To support UK companies looking to expand overseas, Santander UK last year launched Santander Navigator, a digital subscription platform. The platform provides expertise and knowledge collated by Santander Corporate & Commercial Banking’s international team3, including the research from the Trade Barometer, to help UK businesses overcome international trade-related obstacles, understand the attributes of doing business in a new market, and connect them with growth opportunities overseas. Businesses can subscribe to access a personalised service, based on their individual needs, and to help achieve their international growth ambitions. Find out more about Santander Navigator here:





Performance achieved over the past year
•    54% - Businesses reporting their performance improved over the past year. 
•    16% - Businesses reporting their performance deteriorated.
•    Improved performance reported by international trading status:
       o 59% - Internationally trading businesses.
       o 51% - Businesses planning to go international in the next year.
       o 46% - Domestic-only businesses.

Confidence in growth over the next three years
•    76% - Businesses that are ‘confident’ or ‘very confident’ of growth over the next three years (up from 70% in autumn 2022).
•    8% - Businesses that are ‘pessimistic’ about their growth prospects.
•    Confidence by international trade status:
       o 82% - Businesses planning to take their business international soon.
       o 78% - Businesses that currently trade internationally.
       o 69% - Businesses that only trade in the UK.
•    Confidence by sector:
       o  89% - Telecommunication, media and technology. 
       o  79% Finance, property and legal.
       o  76% Manufacturing. 
       o  73% Wholesale and retail. 
       o  72% Tourism, travel and leisure. 
       o  72% Energy and construction. 
       o  69% Transport and logistics.
•    Confidence by region:
       o  79% - London.
       o  78% - Midlands.
       o  77% - South and South East.
       o  76% - Scotland.
       o  73% - North and Northern Ireland.

Factors influencing companies’ ability to grow over the next three years:
•    75% - Rising costs.
•    70% - Ability to attract skilled staff.
•    69% - The UK’s economic prospects.
•    58% - The EU/global economy.
•    53% - Brexit cooperation.

Recruitment challenges and labour market pressures

Staffing issues in the last six months:
•    56% - Higher starting salaries.
•    54% - Number of staff vacancies higher than usual.
•    47% - Brexit-induced staff shortages.

Supply chain diversification
•    41% - Businesses that have taken steps to move their supply chains closer to the UK.  
•    40% - Businesses that have a supply chain reliant on China.
       o  56% - Businesses that plan to reduce their supply chain dependency on China.

International markets

Key challenges reported by businesses in international markets:
•    38% - Transport costs.
•    38% - Post Brexit regulations.
•    35% - Bureaucracy. 

Locations in which international businesses currently operate:
•    84% - The EU.
•    68% - North America.
•    46% - Europe (Non-EU countries).
•    44% - Middle East and North Africa.
•    43% - Australasia.

Locations in which most growth is anticipated in next three years:
•    46% - EU.
•    40% - North America.
•    25% - Middle East and North Africa.
•    25% - Australasia.
•    24% - EU Europe (Non-EU).

Opportunities for growth ranked by country:

1.    US (35%)
2.    Germany (27%)
3.    France (22%)
4.    Australia (20%)
5.    UAE (16%)
6.    India (16%)
7.    Spain (15%)
8.    Canada (14%)
9.    Italy (13%)
10.    Brazil (13%)
11.    Belgium (13%)
12.    Netherlands (12%)
13.    China (11%)
14.    Saudi Arabia (11%)
15.    Ireland (11%)
16.    Japan (11%)
17.    Singapore (10%)
18.    Denmark (10%)
19.    Poland (9%)
20.    Sweden (9%)

Threats to growth of overseas trade:
•    33% - Ability to find skilled workers.
•    32% - Sluggish global economic growth.
•    31% - Brexit uncertainty.

Barriers to domestic businesses going international:
•    41% - Transport costs.
•    36% - Lack of managerial time.
•    35% - Shortage of skilled labour.

Investment plans over the next year reported by businesses:
•    46% - Hiring new staff.
•    40% - Staff training.
•    33% - Product development.

Main drivers of recovery from current economic challenges cited by businesses:
•    38% - International growth (in new and existing markets).
•    36% - Domestic growth.
•    27% - Growth from diversification.

Importance of international trading as a result of current economic conditions:
•    36% - Businesses that believe it has become “more important”.
       o  71% - Businesses that believe it is more important because it reduces their reliance on the UK economy.
       o  65% - Businesses that believe it is more important because international markets have greater growth potential than the UK.
•    61% - Businesses that state its importance is “unchanged”.
•    3% - Businesses that state it has become “less important”.


- Ends -

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Notes to Editors 
1)    Fieldwork carried out between 17 January and 9 February 2023 by YouGov. Total sample size of 1,014 UK businesses with minimum £1m annual turnover.
2)    The Santander Trade Barometer research is carried out bi-annually in spring and autumn.
3)    Santander’s international team has dedicated market specialists that have access to extensive local networks and knowledge around the world, and a long track record of helping businesses implement their international growth strategies. This support ranges from working with them to identify new markets and organising virtual trade missions to introducing businesses to trusted local partners, potential new customers and vital networks in key destinations. For more information on the international support available, visit:

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