Friday December 10, 2021.
TRADE DISRUPTION: Sri Lanka’s export industries which saw supply chains hit by Coronavirus are now facing weaker demand in Europe.
ECONOMYNEXT – With their businesses projected to grow despite increased costs, Sri Lanka’s exporters, mostly small and medium, are looking to hire new workers, a survey has found. With an increase in the use of online channels, exporters are optimistic about growth despite rising raw material costs and an increase in taxes.
“Sri Lankan exporters are confident in their outlook for export growth, despite challenges faced in the first half of 2021,” said the summary of the bi-annual Export Barometer Survey designed and conducted by the Ceylon Chamber of Commerce (CCC) and the United States Agency for International Development (USAID)’s Partnership for Accelerating Results in Trade, National Expenditure and Revenue (PARTNER) project.
The survey was conducted among 120 respondents, a majority of whom represented SMEs, with 75 percent of the exporters surveyed involved in goods exports, with the rest in services.
The Chamber of Commerce said the survey took into consideration the impact of COVID-19, the economy’s response to the new normal and long-term competitiveness.
The survey has found that most of the exporters performed well in the first half of 2021 but not to their fullest capacity. As a result, 44 percent of the firms are now looking to increase their capacity in the next six months, the survey found. The exporters had seen an increase in air freight rates as well as a shortage of flights and vessels to export their goods. Similarly, when they imported goods too they had issues of clearance and delays in schedule times.
An 84 percent of the firms have experienced an increase in freight costs and 87 percent in shipping costs resulting in a cost escalation in raw material costs due to transport and logistics.
In spite of all this, almost 67 percent of the exporters are using online platforms to generate revenue.
“Compared to large firms, both SMEs and women-owned and/or led firms relied more on digital channels (such as social media, online advertising, online marketplace) in generating sales/revenue,” the survey said.
Some 75 percent said they found new export opportunities and have explored new markets with new or existing products and services. However, the businesses are more confident in the growth of their own businesses in the next six months than of the overall economy and are looking to hire new staff in the new future.
The exporters also want the government to improve the efficiency of regulations and tax relief, assistance in supply chain, export finance and a financial assistance package.
“Almost all exporters stated that they need support from policymakers, trade chambers, and donor agencies to be more export-competitive, such as improving market access and establishing links with new customers,” the survey said. (Colombo/Dec09/2021)