Companies lack appetite for export despite prospect of a no deal-Brexit
07 August, 2019
In the looming wake of a no deal Brexit energy supply chain companies are still finding exporting to new markets to be their hardest growth strategy according to a report released today by the Energy Industries Council (EIC).
For the third year running EIC member companies surveyed in the report are shying away from investing in new export markets as their growth strategy, with business leaders still perceiving it as the riskiest strategy with the slowest return to profit, preferring to adopt alternative growth strategies such as innovation, digital and diversification.
In 2019 only 12% of companies interviewed exported their way out of a crisis compared to 19% in 2018.
The ‘Survive and Thrive 2019 Insights Report’ published by the EIC, provides a listing of companies and detailed analysis of eight strategies they have employed to grow against a backdrop of a cautious oil and gas market recovery, growing focus on decarbonisation, and Brexit uncertainty.
EIC CEO Stuart Broadley commented: ‘Our research shows Brexit is a having more of an impact now. Sometimes positive, companies who are net exporters are really seeing growth benefitting from the weak sterling. On the negative side more companies are getting frustrated by the lack of inaction around Brexit, damaging their growth prospects in new export markets and Europe in particular. There is a real possibility UK suppliers may need to look for new markets soon.’
Other key findings in 2019 include:
· 32% of companies surveyed cited as impacted by Brexit
· 36% of companies diversified across the energy spectrum
· 64% percent of companies surveyed cited technology and digital as their most used strategy for survival
· 60% of companies used a service and solution strategy
The strategies put in place in the 2019 edition of Survive and Thrive have generated a massive £1.8bn in savings and new orders.
The EIC recently held its inaugural Energy Exports Conference in Aberdeen as a key action in light of the findings in this and previous years’ reports, aiming to kickstart export growth in energy, and inspire the next generation of exporting business leaders, by attracting major operators such as Aramco, ADNOC, BP, Petronas, Shell and Wood who presented more than US$150bn of global project opportunities requiring UK products and services.
To read the full report visit: https://www.the-eic.com/Publications/MarketIntelligenceReports