The decreasing demand for UK exports due to the increasing strength of the pound has yet to filter into the design industry, although the sector acknowledges it is not yet in the clear.
The issue is not strictly related to the economic crisis in south-east Asia, which a number of UK consultancies say has led to a drop in demand from clients in that region (DW 23 January).
According to a report from the Confederation of British Industry and Pannel Kerr Forster, export orders have fallen over the past four months as sterling has risen against export market currencies. This has effectively increased the cost of work carried out by UK companies in those markets.
However, DBA chief executive Ian Rowland-Hill says design export has yet to be hit by the strength of the pound. “I haven’t had any approaches from consultancies on this issue, although obviously it will increase the price of UK design groups’ exports and make it harder to compete against local consultancies,” he says.
Product design group TKO principal Andy Davey says he is just starting to notice the effect of a strong pound. “It [the rising pound] has taken a while to come through because most of our projects are long term. It has started to be a factor recently as we come to renegotiate contracts,” says Davey. TKO exports to France, the US and Japan.
Meanwhile, any effects in the exchange rate have yet to kick in at Design House, according to chairman Tim May. The group mainly exports retail consultancy services to Portugal and Spain.
“Southern Europeans are very much into deal making, but I can’t say I’ve found clients any more argumentative than usual on the issue of fees,” says May.
Last October the dollar averaged 1.61 against sterling and the Mark averaged 2.86. They now average 1.64 and 2.95 respectively.