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From the war in Ukraine to the global pandemic and heightened trade tensions, navigating multiple crises is becoming the new normal for trading businesses.
Firms have been tested as economies have locked down and reopened, supplies of key commodities and products – from Ukrainian grain to Chinese semiconductors – have been constrained, and the infrastructure of trade placed under extraordinary pressure.
At a glance:
- In the face of years of successive economic shocks that have caused reverberations throughout the economic landscape, trading businesses in the UK have demonstrated remarkable resilience.
- Supply chain pressures have eased with material shortages of key resources falling to their lowest levels since September 2020.
- Globally, merchandise trade volumes are over 7% larger relative to their pre-pandemic levels, although trade growth is expected to slow in 2023.
- Firms in the UK are gaining more confidence about their own trading prospects, in line with a stabilisation of external trade conditions after five months of continuous deterioration.
- While challenges – such as surging input costs, high inflation, labour shortages and wage pressures – remain, many of these factors are likely to ease in coming months, presenting UK businesses with an advantageous, albeit uncertain, environment in which to do business.
- 33% of firms believe that there are opportunities present in seeking new markets, taking advantage of shipping costs which have returned to levels last seen in 2019.
- While trading firms stand to benefit, the emphasis should be placed on building resilience into their supply chains – from improving end-to-end visibility to considering ESG factors – in order to withstand any element of further unpredictability.
Read our full Trade Insights report (PDF, 3.5MB) for more on how companies have both shown resilience and responded with agility during these unprecedented times.
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Originally published at: Lloyds Bank
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