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Barclays Business Prosperity research has revealed that despite widespread concerns over new US tariffs, UK businesses—particularly larger firms—are adapting and predict a net positive impact on exports, supply chains and profits.
Conducted between May 12 and 22 , the survey of 1,000 UK micro, small, medium and large businesses found that 79 per cent respondents are concerned about tariffs and global trade uncertainty and nearly half are already adjusting US operations or supply chains.
Barclays Business Prosperity research has revealed that despite widespread concerns over new US tariffs, UK businesses—particularly larger firms—are adapting and predict a net positive impact on exports, supply chains and profits.
Seventy-nine per cent respondents are concerned about tariffs and global trade uncertainty and nearly half are already adjusting US operations or supply chains.
Despite concerns, many expect positive effects on profit margins, customer demand, export volumes and supply chain stability.
Data suggests action was taken before tariffs were implemented on April 2, with 59 per cent of those who have increased trade doing so with Europe and Central Asia in the first quarter (Q1) this year—compared to North America (18 per cent) and Asia-Pacific (10 per cent).
Almost half say improving productivity is more important now than a year ago, with 72 per cent finding hiring difficulties are holding back growth, a Barclays release said.
UK businesses remain confident about their own prosperity (86 per cent over the next three-five years), despite widespread concern about tariffs and global trade uncertainty (79 per cent).
This uncertainty has resulted in UK firms taking proactive steps to diversify international trade and build resilient supply chains, whilst looking to benefit from potential upsides to tariffs.
Forty-eight per cent are already adjusting their US operations or supply chains, with 14 per cent scaling down and 15 per cent pausing or reducing investment in the market.
Additionally, 59 per cent of businesses that who increased trade didn’t wait for tariffs to come into effect and reported doing so with Europe and Central Asia in the last 12 months—far outpacing growth in North America (18 per cent) and Asia-Pacific (10 per cent).
Almost half of businesses (44 per cent) increased international trade over the past 12 months.
However, despite the concerns, many businesses expect the potential upsides from US tariffs to outweigh the negatives on profit margins (36 per cent), customer demand (37 per cent), export volumes (34 per cent) and supply chain stability (34 per cent).
Yet in general, 37 per cent of UK businesses still expect a negative impact from the US tariffs on their overall prospects.
The current economic climate is also driving action on productivity, with 46 per cent of UK businesses claiming improving productivity is more important now than a year ago. This comes amid a backdrop of 72 per cent of businesses finding difficulties in hiring skilled labour, which they attribute to holding back growth.
The majority (89 per cent) of businesses are planning to take steps to improve the productivity of their workforce, prioritising investing in upskilling employees through training (34 per cent) and streamlining processes and improving efficiency (32 per cent).
Investment plans reflect the ongoing focus on boosting productivity, with nearly half of businesses (46 per cent) intending to invest in staff training and development. Meanwhile, 39 per cent will prioritise innovation and new product development and 35 per cent plan to invest in digital transformation.
Business investment in physical assets also remains strong, with 35 per cent of firms aiming to purchase new or upgraded equipment, machinery, or vehicles, and 33 per cent planning new or expanded facilities.
Global uncertainty is affecting business uptake of debt finance for investment, with close to four in five (79 per cent) not borrowing to invest over the last 12 months.
Of those who considered borrowing to invest but did not go ahead, 48 per cent cited economic uncertainty or awaiting a better environment for choosing not to. Over a third (34 per cent) cited high interest rates as the main barrier to borrowing.
However, 9 per cent expect to hold back on investment altogether in the coming year, suggesting an intent to invest remains.
Fibre2Fashion News Desk (DS)
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