A surge in inflation and friction following Brexit has reportedly stagnated UK exports for more than a year.
A survey of 2,600 companies conducted by the British Chambers of Commerce (BCC) found that 29% of businesses reported increased sales abroad, for the fifth consecutive quarter, while sales declined for a quarter of respondents.
In addition to customs checks and delays at the border, firms said Brexit was one of the biggest barriers to exports.
The figures indicate that trade has yet to recover since Coronavirus lockdowns ended and the UK left the EU.
The BCC report says only 39% of manufacturers shipping overseas expect profits to rise in the next year.
"The combination of supply chain disruption, soaring prices, and the impact of Brexit red tape and compliance costs has had chilling effects on exports," William Bain, head of trade policy at the BCC, said in a statement.
"There are serious underlying issues, which are hitting smaller manufacturing exporters the hardest."
Bain said since last summer, UK exports to the EU and overseas have stagnated, while other major exporting countries have experienced growth.
Last month, the Centre for Economic Policy Research and the UK in a Changing Europe thinktank found that the desire for a 'hard' Brexit resulted in a significant increase in trade barriers and trade costs in goods and services, as well as "new restrictions on migration flows".