Exporters urged to avoid pain of euro break-up

Around 1,600 Yorkshire businesses sell goods and services with a combined value of more than £6bn a year into the European Union, according to accountancy firm Deloitte.

This represents a significant portion of the region’s £90bn economy.

“The obvious concern is the figure goes down,” said David Sproul, senior partner of Deloitte in the UK,

“While there’s a lot of focus on the contractual implications if there were any break-up, clearly the main issue is around the level of economic activity and the ability for us to continue exporting.”

He added: “The key issue is if there is a smaller market in Europe, to make sure that our companies in Yorkshire and the North East are getting as big a share of that market as possible.”

Mr Sproul said the recent elections in Greece and France have increased uncertainty and made businesses more risk averse and cautious about new investment opportunities.

This view was supported by the CBI’s monthly industrial trends survey yesterday, which showed that factory orders deteriorated more than expected last month, as exports fell.

Mr Sproul added: “If you then roll forward and say what happens if the Greek election comes through and we do have a socialist government and they choose to try to renegotiate the bail-out, I think we have to work on the basis that it’s in everyone’s interests that Greece stays in the eurozone and that the eurozone stays together.

“I think the efforts of our political and business leaders need to continue to be focused on that goal.” According to Yorkshire Bank economist Tom Vosa, the region trades slightly more intensively with Europe than the UK average and will be disproportionately affected.

Mr Sproul said the real issue for Yorkshire exporters is to focus on delivering what their European customers need.

“When we talk to our clients in Europe who are going through their own recession and look at what they are buying from the UK, all clients want lower stock, shorter supply chains,” he said.

“One thing we are saying to businesses is look at how they can accelerate their ability to respond to orders, build more efficiency so they operate more effectively.

“The second thing they have to do is make sure they are confident about the credit quality of the business they are dealing with, make sure they have appropriate trade credits and financing arrangements in place.

“The third thing is just to recognise that if there were a challenge with the eurozone then they want to make sure their contracts and their currency exposures are well managed and well protect- ed.”

Mr Sproul, who head an organisation with 12,000 employees, was speaking to the Yorkshire Post during a visit to Leeds.

Deloitte last night hosted an event to mark 100 days before the opening ceremony of the Paralympic Games.

The Big Four firm is the professional services provider for the 2012 games.

Mr Sproul said: “I do think with the Jubilee weekend, with the Olympics, the European championships, all of that is going to lift energy, lift passion.

“When you go to the Olympics in particular, clearly it has got a nexus in London, but it impacts the whole country.

“We have the torch going around the country, there are teams training in Leeds, so I do think it is going to lift not just spirit but economic activity.

“We will see a boost in all those obvious things around service sector, tourism and retail around the Olympics.

“As we come out of the Olympics around September, that will coincide with a return to a bit more confidence around the economy in the eurozone, which will give us that platform to grow from.”

He said the legacy of the London Olympics will include businesses across the UK, which won contracts and are stronger as a result.

He added: “I’m an optimist. There is no question that people were smiling a bit more when the sun came out.”

A quieter time in Europe

SALES activity in Europe has been quieter during March and April, according to one Yorkshire exporter, writes Alicia Clow.

But William Beckett, managing director of William Beckett Plastics, said it was too early to say if the eurozone crisis will have a real impact on his business, which exports to the United States and Europe.

Mr Beckett said that machine tool sales broke all records at a recent trade fair and “no-one buys machine tools if they are not investing for the long term”.

Sales to Germany have increased by 100 per cent over the last three years, he added.