Small Business Survey Scotland: 2018

3. Trade activities 

International exports 

14 per cent of SME employers in Scotland reported that they had sold goods or services (including commissions, royalties and licences) internationally (outside of the UK) in the last 12 months, unchanged from 2017. In the UK as a whole, a higher proportion of SME employers (20 per cent) had exported goods or services internationally in the last 12 months, also unchanged from 2017. 

The likelihood of exporting internationally increased with business size. Medium-sized businesses (33 per cent) were more likely than average to export.

International exporting was most common in the Manufacturing (37 per cent) and Business services (26 per cent) sectors. International exporting was least common in the Construction sector (four per cent) (Figure 1).

Figure 1: International exporters by sector, 2018

Base: all SME employers, 836 - Base minimum: Information/Communication, 35

Don’t know: 0% of SME employers

In Scotland, the proportion of SME international exporters exporting to European Union (EU) countries (77 per cent) and non-EU countries (73 per cent) was broadly similar. The proportion of SME exporters exporting to both the EU and non-EU countries was broadly in line with the prior year^[14]. In the UK as a whole, a higher proportion of SME international exporters exported to EU countries (78 per cent) than non-EU countries (67 per cent).

New for 2018, SME international exporters were asked for more detail on the non-EU markets they exported to (Figure 2). European Free Trade Association (EFTA)^[15] countries were the most common non-EU export market, with 37 per cent of international exporters selling goods or services there, higher than the UK as a whole (25 per cent). 33 per cent of SME international exporters exported to the USA, lower than the UK as a whole (40 per cent). Some 16 per cent sold to China, 16 per cent to Canada, 15 per cent to India, eight per cent to Turkey, four per cent to South Korea, and 42 per cent to other non-EU countries. 

Figure 2: Destination of exports, 2018

Base: SME employers that have exported internationally in the last 12 months, 144

Don’t know: 7% of SME international exporters

Figure 3: Destination of international exports, 2018

Base: SME employers that have exported internationally in the last 12 months, 144

Don’t know: 7% of SME international exporters

20 per cent of SME international exporters in Scotland exported to EU countries only while 16 per cent exported to non-EU countries only. 57 per cent exported to both EU countries and non-EU countries (Figure 3). 

The majority of SME international exporters in Scotland (85 per cent) were established exporters, exporting for more than five years. 13 per cent had been exporting for five years or less^[16].

For 55 per cent of SME international exporters in Scotland, exports accounted for less than quarter of their business’ annual turnover. Exports accounted for between a quarter and half of turnover among 17 per cent of SME international exporters in Scotland, between half and three quarters of turnover for 12 per cent and over three quarters of turnover for a further 16 per cent.

Of those SME employers that were already exporting internationally, 57 per cent planned to increase their level of exports over the next few years. 

Of those SME employers that were not currently exporting to countries outside the UK (86 per cent), the majority (94 per cent) reported that they had no plans to start exporting. Of those SME employers that were not exporting and had no plans to start, the majority (80 per cent) believed their goods/services were not suitable for exporting.

Exports to the rest of the UK

44 per cent of SME employers in Scotland reported that they sold goods or services to customers in other UK nations. This is an increase from 31 per cent in the prior year (2017)^[17] but the same as the figure in 2016 (44 per cent). The figure in Scotland in 2018 was broadly in line with the figure for SME employers in the UK as a whole at 43 per cent. 

Medium-sized firms (52 per cent) were more likely than average to have exported to the rest of the UK. 

By sector, SME employers in Manufacturing (72 per cent), Information/Communication (69 per cent), and Business Services (66 per cent) were more likely than average to have sold goods or services to the rest of the UK. Whereas, SME employers in Transport/Retail/Distribution (33 per cent), Construction (32 per cent) and Other Services (22 per cent) sectors were less likely than average to have sold to the rest of the UK. 

International imports

21 per cent of SME employers in Scotland had directly imported goods or services from countries outside the UK in the previous 12 months, broadly in line with the proportion in the UK as a whole (23 per cent) and with the proportion in Scotland in the prior year (19 per cent). Medium-sized businesses (36 per cent) were more likely than average to import. 

18 per cent of SME employers in Scotland had directly imported goods or services from the EU, broadly in line with the UK as a whole (19 per cent). 10 per cent had imported from non-EU countries in 2018, lower than the proportion in the UK (12 per cent).

Imports from the rest of the UK

57 per cent of SME employers in Scotland reported that they bought goods or services from other UK nations (higher than the proportion in the UK as a whole at 33 per cent).

Medium-sized businesses (78 per cent) were more likely than average to have imported goods or services from the rest of the UK. By sector, SME employers in the Manufacturing (87 per cent) and Primary (74 per cent) sectors were more likely than average to import goods or services from the rest of the UK, whereas those in Other services sectors (45 per cent) were less likely. 

Imports, exports, and goods and services bought from or sold to the rest of the UK are summarised for Scotland and the UK as a whole in Figure 4.

Figure 4: Imports and exports by SME employers, 2018

Base: SME employers, 836