Exporters vs Non-exporters: Is There a Clear Winner?

Farzana Haque, 23 MARCH 2023

Exporting—selling goods and services abroad—is, obviously, a big deal in the UK. Last year, the UK’s exports of goods and services totalled a whopping £813 billion. With 10.7% of GB businesses exporting in 2020, the UK ranks as the 7th biggest exporter globally.

Selling internationally has many advantages. For example, diversifying your market can help you weather economic instability, grow faster, and increase profit. So, it comes as little surprise that local governments want to ‘champion export-led growth as the driver of economic recovery and future prosperity’.

Here at Beauhurst, we’ve just added a new dataset: commodity trade data. This new data set covers imports and export from 2016 to the present day. As we explored our exciting new data set, we thought to ourselves, what would happen if we analysed the success of exporters vs non-exporters? Would we see exporters grow significantly faster? Are businesses statistically better off as an exporter depending on their industry?

Well, we satisfied our curiosity and did the analysis. Read on the find out the results!

What does the data say?

To find our answer, we looked at high-growth companies with turnover filings in 2018 and 2021 and measured the compound growth over this period. We then compared those companies who had exported during this period to those who hadn’t. Our research is based on a sample size of 1573 exporters and 4180 non-exporters

Growth can be tracked in a number of ways and as such, we explored numerous measures in our analysis. Exporters were the clear winner when considering the average 2021 as exporters made almost £20m more than non-exporters in the same year. Using turnover data, we calculated the Compound Annual Growth Rate (CAGR) between the two groups, where again, exporters fared better. They had a higher average CAGR of 6% whilst non-exporters had an average CAGR of 5%. There was a big variation in the CAGR of both groups—a standard deviation of 47% within non-exporters and 22% within exporters—meaning, the CAGR of exporters were much closer to the mean.

On our platform, we track eight high-growth triggers. When we measured our sample groups against these, we found interesting conclusions. Significantly, non-exporters weren’t miles behind exporters—in fact, in some metrics—non-exporters were even marginally ahead. We also found that the difference between exporters and non-exporters was insignificant in quite a few categories. For example, in terms of equity raised, acquisitions completed and accelerator attendance, only 1% separates the two groups.

Exporters were, however, more much likely to feature on high-growth lists, with 48% of exporters having done so, in comparison to only 37% of non-exporters. We also found that a higher percentage of exporters also received grants compared to non-exporters, with 5% between them.

Do exporters fare better in specific sectors?

So far, exporters already seemed to have an advantage over non-exporters, but we wondered if the difference was even more pronounced in specific sectors. Particularly, do exporters turnover significantly more profits in the sectors the UK is renowned for exporting in?

Taking the average CAGR of exporters and non-exporters within these sectors, we find that exporters almost always win. Within the UK’s biggest exporting sectors such as metals, pharmaceuticals, energy, automotive, aerospace and chemicals, the companies that export have a higher CAGR than those that do not. In some of these sectors, there’s a stark difference. We can see that pharmaceutical companies that export have an average CAGR of 22% whilst non-exporting pharmaceuticals have an average CAGR of just 0.1%. The only outlier to the trend is the plastics industry where non-exporters have a 9% higher average CAGR.

Even in the sectors that appear to have little difference in average CAGR such as chemicals, the potential of exporters is prominent. Indeed, the average 2021 turnover for chemical exporters was £20.5m higher than their non-exporting counterparts.

Is there a clear winner?

Our analysis has revealed that exporters in numerous sectors such as pharmaceuticals, metals and automotive, do indeed have the upper hand in most measures. This could be down to a number of causes—risk mitigation from diversified customer bases, competitive advantage and greater insights into market trends and customer preferences, and increased sales volume from access to a bigger market.

While there are some instances where non-exporters fare equally well, we can see that exporters have more potential to reach higher profits.

If this has piqued your interest, check out our summary of our latest data set—trade data—here. If you have any questions about the data or our methodology, reach out to us info@beauhurst.com.

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