The British Chambers of Commerce (BCC) today publishes its Quarterly Economic Survey – the UK’s largest and most authoritative private sector business survey.
BCC says October Trade data a warning sign
Reacting to the latest ONS Trade figures, William Bain, Head of Trade Policy at the British Chambers of Commerce, said:
“The recent uplift in trade with the EU following a difficult start to 2021 is not being sustained, and in October tipped into reverse.
“This is a warning sign. Although the data is a one-month snapshot it feeds into a detectable trend of a levelling off of the recent improvement in UK-EU trade in goods following a very difficult start to 2021.
“In October this may even have slipped back into reverse. On the import side global factors are playing a role such as the worldwide shortage of semiconductors affecting car production.
“But these figures show why the EU-UK trade relationship needs to be improved over the next year with further progress in areas, such as VAT, to ensure trade is being facilitated as well as it can be in the short and medium term.”
Goods imports from the EU fell by 3.6% in the month of October and goods exports to the EU fell by 2.7%.
The fall in goods imports from the EU was driven by lower imports of machinery and transport equipment (fewer ships from Germany and cars from the Netherlands) chemicals (reduced imports from Germany and Ireland) and manufactured materials. The shortage of semiconductors globally is one factor behind lower car production and imports from the EU.
Imports from non-EU countries were higher than from the EU for the tenth month in a row, as fuel imports from outside the EU continue to be high. Gas imports from Norway rose by £1bn in October. There was also evidence of lower car imports from China too.
Compared with the three months to July 2021, goods exports to the EU in the three months to October 2021 fell by 3.5%, and goods imports by 0.7%.
Compared with the period in 2018 prior to changes in Brexit dates and the expiry of the transition period, EU goods exports were £1.2bn lower in October 2021 than in October 2018 and goods imports £3.6bn lower over the same period. Over the same period non-EU goods exports were £1.7bn lower but non-EU goods imports £2bn higher. October’s increase in non-EU goods exports was mainly in chemicals, fuels, machinery and transport equipment.
The overall UK trade deficit widened by £4.5bn in the three months to October. In goods the deficit increased by £6.2bn over the same period, offset by an increase in the services trade surplus of £1.6bn in the same period.
Compared with the 3 months to October 2018, overall UK trade in goods in the 3 months to October 2021 was 11.4% lower in exports and 3% lower in imports.
The full ONS statistics can be found here.