Reacting to the latest ONS Trade data for February, William Bain, Head of Trade Policy at the BCC, said:
“This latest data provides further evidence the UK is finding it tough to generate any sustained rise in exports. The overall picture for the last two years is broadly static, although this masks a better position on services than with goods.
“Services exports values showed a modest rise in February 2023 by 0.7% (excluding inflation). This mirrors the shallow recovery in services export volumes over the past two years.
“But this is not enough to compensate for a lacklustre performance elsewhere. Additional data from the Bank of England and the Office for Budget Responsibility indicates that the UK’s export performance is the worst in the G7.
“The World Trade Organisation’s latest forecast for global trade growth of only 1.7% in 2023 demonstrates the strength of the headwinds facing all exporters.
“But this is precisely the time to be putting measures in place to raise export capacity and readiness here at home. The Government must do more to help firms export – it is vital for the overall growth of our economy.”
Analysis of the data:
Removing the effects of inflation, total UK goods export values fell by 0.8% compared to January. A fall in goods export values to the EU of 6.2% (driven by lower volumes of fuels, machinery and transport equipment) was accompanied by a fall in sales to the rest of the world of 0.7% (largely in lower chemicals exports to China and South Korea).
Total goods imports values (excluding inflation) fell by 1.5%. Import values from the EU rose by 1.5% on January driven by machinery and transport equipment import gains (including cars from Germany) and higher fuel imports (refined oil from the Netherlands). But import values from the rest of the world fell by 4.5%, with reduced gas and oil imports from the US and Norway, and lower chemicals imports from the US.
In services, excluding inflation, import values rose by 0.6% while export values rose by 0.7%.
In the three months to February 2023, goods export values fell by 3.8%, and goods import values by a smaller amount of 1.8%. Services export values fell over the same period by 1.6%, while imports fell slightly by 0.4%.
In the three months to February 2023, the overall UK trade deficit, removing inflationary effects, widened to £13.2bn.
More detail on the ONS data can be found here.