We’re now three months on since the UK went into lock-down as a result of the Covid-19 pandemic. Businesses have had to be patient and endure a lot of hardship, with reduced trading opportunities on both a domestic and international level affecting many bottom lines. We’ve already talked about how this unexpected downtime can give business leaders more time to plan for the future but is now the time to start putting those plans into action? We certainly think so.
We’re starting to see a steady trickle of businesses in the UK gradually getting back into the office environment, which will provide a huge step to getting back on track and running on a more ‘business as usual’ approach.
It would be naive to think that nothing has changed, we all know there is no longer a ‘normal’ when it comes to running a business as there is so much volatility in the markets that is likely to have a lasting effect for many years to come. We can, however, look at what it is possible to do in business, and take note of the economic outlook in other regions to see how we can align our own business prospects with this.
The appetite to do business is strong
Businesses want to do business. The government backed support that has been put in place has been done so to help businesses survive the interim period of the covid-19 pandemic, but the only people that can help these businesses kick on now are their leaders.
The positive thing about this, certainly from our experience on a local level within the Sheffield City Region, is businesses are resilient. We’re strong on the manufacturing front and always will be. This is where heritage meets the future – those that stand still fall by the way-side, but those that adapt to current and future trends survive and prosper. It’s a similar situation to what we’re in now really, only we have far greater technological advances that make communicating on a global scale much easier.
This is the opportunity for smaller, more agile businesses to think strategically and seek to expand their market share, or to test things that they have never done before.
Ignore the headlines
We like to focus on the positives as opposed to the negatives. Headlines around the world all read doom and gloom, but if you take a closer look there is opportunity for those willing to take a risk. It’s almost impossible for business analysts to predict the short term at present, as another outbreak could put a stop to everything once again if a new lock-down is declared.
The difference between businesses that succeed during difficult times and those that do not is the fact that those who did took hold of the opportunity and responded, perhaps in ways they had never previously thought possible.
Exports are still important to UK businesses, and supply chain imports can provide a lifeline for squeezed profit margins. We only need to look at other regions to see how businesses can seize opportunities on a global scale.
Take this Malaysian glove manufacturer as an example. Shares in Top Glove have increased by over 250% as demand has increased from every corner of the globe, with some customers placing orders up to a year in advance. One may argue this business is an exception to the rule as they are in a short lived market directly related to the current pandemic, but this is their core business activity and they have been around since 1991. They now need to make sure they have the right supply chains in place for their raw materials to help cope with the demand.
Much can be said for being in the right place at the right time, but this highlights just how important both the import and export markets are. Without spreading the risk in terms of their imported supply chains, exporting their product around the world wouldn’t be possible. This is something we can all learn from.
No Brexit extension
Moving on to everyone’s favourite subject pre covid-19 – Brexit. Yes, this is still happening, and no, there won’t be any further extension to the transition period according to the British government.
What relevance does Brexit have on this article we hear you say? Well, rather than just sweep this under the carpet this is going to have a big effect on supply chains and businesses need to be ready from January 2021 to ensure there are no further impacts to their ability to trade.
Businesses will need to make sure they are set up to change from free trade to full customs procedures, duties, and VAT with EU member states. Free trade agreements are either already there, or in the process of being defined with trading nations outside the EU regardless of the UK’s relationship with the EU, which is something we have been advising our clients to consider for some time now. There are trading opportunities out there, and there always have been. These are vital to the economic recovery of the UK as much as they are to the rest of the world.
If you rely on imports as part of your supply chain, the key message here is to spread your risk. As we could see further lock-downs on local levels should there be further outbreaks of Covid-19, this could cause temporary problems with supply chains. Looking into alternative markets is essential for any business in this situation, and there is a whole world to choose from.
Let’s look at Southeast Asia
The Southeast Asia region is our area of expertise at Mosaic International, and we are long term advocates of building trade links between here and the UK. Nothing has changed in terms of our outlook to the region and we still believe these emerging markets are prime for further business development opportunities with UK businesses. But, what can we expect to see from this region over the coming months?
The short term outlook falls under one of the negative headlines we discussed earlier, with Malaysia expecting a significant fall in GDP for Q2 in 2020. However, as we take a closer look, whilst the market is set to contract by 4% in 2020, there are also signs pointing to a 6.5% growth in 2021. So very much along the lines of short-term pain for long-term gain.
Singapore, similarly is expecting it’s market to contract, but with signs of growth in certain sectors and a focus on how technology can allow for new innovation, they are focusing on future industries to support the nation.
What about China?
Questions have been raised amongst British businesses as to why China is not being considered as a top priority for a new trade agreement. Regardless of any external political problems between the two nations, China remains Britain’s third largest export market after the EU and the USA.
It does appear that a sustained reform to the business environment will allow for future economic growth – something that can only be beneficial on both sides of any trade agreement.
An interconnected world
There is an underlying message running through all of this, and that is embracing an interconnected world and creating open markets for trade are crucial for supporting growth and creating new business opportunities.
If you are open for business, then you need to consider the bigger picture. Mosaic International can help facilitate this on both sides. If you have already taken a step back, now is the time to move forward once again.
We’re open for business, and ready to help our clients identify new opportunities to make sure they are too. If you would like to start a conversation, drop us a line on 07885 784783 or email@example.com, you never know where it may lead.