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More than half of UK businesses are considering selling into new markets in response to the Covid-19 pandemic, new research suggests, though there remains a lack of awareness of government support schemes in place to help exporters.

An independent survey of 900 business leaders commissioned by logistics company One World Express found that 57% of private sector organisations are looking at new opportunities outside the UK market, explicitly in order to minimise the virus’ impact on their growth.

Though a minority currently regularly provide goods or services outside the UK, 45% of all firms surveyed say the outbreak has made their organisation realise it is overly reliant on one particular market for its revenue. That figure rises to 58% among those with 250 or more employees.

“Exporting globally could be the difference between life and death for businesses in 2020,” says Atul Bhakta, chief executive of One World Express.

“After all, countries around the world have been affected by the virus’ spread in different ways, so any business that sells to a broader range of markets is giving itself the best possible chance to succeed.”

The pandemic has hit the global economy hard, with UN data predicting a 27% drop in the overall value of global goods trade in the second quarter of this year.

In the UK’s case, the Office of National Statistics (ONS) revealed this month that the first quarter of 2020 marks the largest contraction in the economy since the 2008 financial crisis, after widespread declines in output in the services, production and construction industries.

“The pandemic also hit trade globally, with UK imports and exports falling over the last couple of months, including a notable drop in imports from China,” adds Jonathan Athow, the ONS’ deputy national statistician for economic statistics.

The British Exporters Association (BExA), an industry group representing UK firms that sell to international markets, says it is “no surprise” firms are examining what could improve their fortunes once trading activity recovers.

“History has taught us that global or domestic crises are a good time for reflection and refocusing,” a BExA spokesperson tells GTR.

“Diversity of product range and markets is always a useful step in protecting a business from economic shocks and BExA welcomes the finding that more businesses are looking to overseas markets post-pandemic.”

However, the survey also encounters familiar challenges faced by firms not used to exporting.

51% say a lack of knowledge about international markets prevents them from considering new export opportunities, while 43% say they believe exporting would be “too difficult or costly”.

Just 35% say they are aware of the potential support provided by the UK government. For larger firms that number drops to just 30%.

“The fact that only around a third of businesses know what support is out there and available to them shows that the Department for International Trade (DIT) still has some considerable work to do in order to get their messaging out there,” the BExA spokesperson says.

There are also question marks over the effectiveness of existing measures, despite an ambitious export strategy set out in 2018 to increase the share of national GDP that is derived from exports from 30% to 35%.

In a benchmarking report published in October 2019, BExA said there has been “minimal progress” from DIT in meeting those aims. It says access to funding needs to be improved, particularly for SMEs whose desire to export tends to “test the appetite” of high-street banks, and that bidding for involvement in government projects needs to be made easier.

SMEs accounted for less than 32% of the country’s exports in 2018, down from more than 50% a decade earlier, according to research published earlier this year by the British Business Bank. That report also found firms suffer from a lack of support in handling the risks that come with targeting new markets.

In its annual review for 2019, BExA adds that exporters are encountering insufficient pre-contract support, “whether that be market entry, bid creation, tender to FX cover, environmental impact assessments or other direct cost associated with companies growing their exports”.

It has also consistently called for changes to international rules allowing UK Export Finance (UKEF) to provide 100% insurance cover for trade transactions, rather than the current upper limit of 85%. It says financial institutions currently face “significant difficulties” pricing the remaining 15%.

Industry insiders, however, are optimistic that the pandemic has provided an impetus for banks to reassess the level of financial support they give to firms hoping to export.

Miles Celic, chief executive of TheCityUK – an industry group representing financial and professional services sectors – told a parliamentary inquiry on the impact of Covid-19 that trade finance is “one of the main ways that the industry has been supporting the wider economy through the crisis”.

“About 90% of all trade involves some form of financial instrument within it or supporting it. This is particularly the case with the banks, which finance between one-third and two-fifths of global merchandising trade,” Celic told the cross-party International Trade Committee earlier this month.

“That has been a huge area that we have been working on. Companies within our membership have been working with the UK government, with the European government, with international institutions and with other governments to look at what more can be done for micro, small and medium enterprises in terms of supporting them through support for exports.”

Beyond Covid-19, the One World Express survey finds Brexit is another important factor driving change within firms. Though the country has no longer been an EU member state as of January 31 this year, a transition period that runs until the end of 2020 means firms can currently continue trading on the same terms as before.

The survey found 44% of businesses are now looking to expand to markets outside the EU as a result of Brexit – though 40% of respondents say they plan to wait until the full impacts are clear, while 51% say free trade agreements put in place by the UK are a key consideration in deciding which markets to target.