The success of British athletes in the Olympics represents a dramatic turnaround after decades of seemingly inexorable decline in our international competitiveness. Can British exporters now do the same?

As the credit crunch started to bite on the financial sector, there were hopes that manufacturing might be able to fill the gap, but once again the hopes that Britain could reclaim its lost status as a workshop for the world, even on a modest scale, are being dashed.

A survey from Euler Hermes, the credit insurer, reports that UK plc's overseas trade fell for a second month in a row in July and at the fastest pace since November 2001. The CBI adds to the gloom, finding that manufacturers' expectations of future output are the bleakest for seven years as mounting pessimism over domestic economic woes mingles with despondency over foreign sales.

The Euler survey pins the blame for exporters' gloom on the rapid slide in the eurozone economy, helped on its way by the European Central Bank's decision to raise interest rates in the 15-nation bloc. While the drop in the pound's trade-weighted value by almost 12per cent over the past year may have boosted our national competitiveness, the benefit has been offset by the decline in our main markets.

But is there more to it than that? Have our exporters again sacrificed an opportunity to exploit a weaker pound - down 14 per cent against the euro over 12 months - to expand in what were, until recently, resilient markets?

On the face of it, the figures look good. The value of exports to EU countries was up by a chunky 18.4per cent in the second quarter from the same period a year earlier. But what about the quantity of goods sold? Over the same period, our export volumes rose by only 0.1per cent and excluding oil and “erratic items” - precious stones, aircraft and the like - they were down by 0.8 per cent.

So it appears to be the old story. The pound dropped and many exporters chose to exploit the chance to boost their margins - perhaps keeping their euro price the same for EU customers but getting a few more pounds in return - rather than keeping their sterling prices constant and grabbing a bit more market share while they could.

It is an understandable response. But, in the longer term, it is not the strategy that will bring home the gold medals.

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