The Trade Confidence Outlook, conducted by the BCC's Insights Unit, is a survey of more than 2,000 UK SME exporters.

It shows SME exports have been broadly static since the pandemic and remain far less likely to see improvements when compared to the pre-pandemic and pre-Brexit period.

In Q4 2018, 28% of SME exporters reported an increase (5 points higher than Q4 2023) and 16% reported a decrease (8 points lower than Q4 2023).

Post-pandemic, there has also been a noticeable divergence between domestic trade performance and exports. As the economy reopened in 2021 there was a sharp increase in UK sales, but overseas orders saw no corresponding rise, indicating that SME exporters have been disproportionately impacted by headwinds in global trade caused by Covid lockdowns and new trade barriers with the EU.

The proportion of firms seeing increased UK trade in Q4 2023 stood at 34%, an eight percentage point difference over the 26% of exporters.

The proportion of businesses reporting decreased overseas sales began to rise in the run-up to Brexit and has remained stubbornly higher ever since.

The situation remains more volatile for SME manufacturers than other sectors, with 28% reporting an increase in exports, 44% no change and 28% a decrease.

This compares to SME services exporters where 25% saw an increase, 53% remained constant and 22% saw a decrease. However, firms supplying services to other businesses (B2B) saw the most stable performance - with only 20% reporting decreased sales, against 27% of businesses supplying end customers (B2C).

William Bain, head of trade policy at the BCC, said:  "The global outlook was already looking fragile for 2024, but with increasing disruption to Red Sea shipping routes and continued geo-political uncertainty, it appears even more brittle.

"The reality is if we want to remain one of the world's largest economies, then we need to get more firms selling goods and services internationally.

"This is not easily done in the aftermath of a pandemic, supply chain disruption, Brexit, increased non-tariff trade barriers and further global headwinds.

"But the UK's brand remains strong, so we must lean more heavily into the advantages we possess. We are already a world-leader when it comes to digital trade, and we must make more of the opportunities that provides.

"The UK has great strengths in our exports - services (including professional, business and travel services), renewable energy, green finance, engineering, advanced manufacturing, pharmaceuticals, automotive, food and drink, and R&D.

"Business needs to work with Government to put in place a framework that makes use of all the advantages the UK has, to keep us at the top table, and to access incentives for our exports overseas.

"Finally, we need to look again at ways of improving trade with the EU. It is still our biggest trading partner, but firms continue to express huge frustration with the complexity and costs involved - which go way beyond what they face elsewhere."