BCC: Upswing In Trade Must Be Sustained
13th June 2022
Responding to the latest ONS Trade figures released today, William Bain, Head of Trade Policy, said:
“It is heartening to see an increase in the rate of exports to the EU and the rest of the world. Nevertheless, continued progress is needed to meet the Office of Budget Responsibility’s (OBR) forecast of a net increase in UK exports of 9% across the whole of 2022.
“On exports to the EU, the welcome increase of 8.8% since March is driven mainly by fuels and, to an extent, by machinery and transport equipment, but exports to the EU in chemicals, food and material manufactures remain flat.
“On the import side, there are early signals on the potential for delays, due to COVID outbreaks centred around major ports in China, which may impact the flow of certain goods into the UK.”
Trade data overview
UK goods exports accelerated in April 2022 with increases in exports to the EU rising by 8.1% (£1.2bn) and to the rest of the world by 6.5% (£0.9bn). Main factors in increased goods exports to the EU were machinery, transport equipment and fuels (gas and crude oil).
Food, chemicals and material manufactures exports to the EU remained flat in April 2022. OBR forecasts for U.K. export growth in 2022 were 9% and 7% in imports.
Imports of goods from the EU rose by 4.2% in April driven by increases in machinery, transport equipment and chemicals, but from the rest of the world fell by 2.6% - an overall rise in goods imports of 0.7%. There was a reduction in cars, electrical machinery and other manufactured goods from China.
Comparing the 3 months to April 2022 with the 3 months to January 2022, goods exports to the EU increased by 15% and to the rest of the world by 2.7% - an overall rise of 8.8%. This is line with OBR forecasts from last autumn for export growth (so far) in 2022. Comparing the 2022 data with that in 2018 - the last stable period before EU exit and changes in methodology - exports were 6.1% higher in the 3 months to April 2022 compared with the 3 months to April 2018.
Early estimates for services exports in Q1 2022 reveal a very modest increase of £0.1bn in that period.
The overall UK trade deficit widened to £21.4bn (ex-inflation) in the three months to April 2022.