Statistical bulletin: UK Trade, July 2012

July 2012

• Seasonally adjusted, the UK's deficit on trade in goods and services was £1.5 billion in July, compared with a deficit of £4.3 billion in June.
• There was a deficit of £7.1 billion on goods, partly offset by an estimated surplus of £5.6 billion on services.
• In the three months ending July 2012 trade in goods and services was estimated to have been in deficit by £8.0 billion, compared with a deficit of £10.5 billion in the preceding three months.
• Excluding oil and erratic items, the volume of exports was 0.9 per cent higher in the three months ending July 2012 compared with the preceding three months. The volume of imports fell 0.8 per cent over the same period.
• As ONS previously announced in its statement on 3 July 2012, exports and imports price indices data are not available in this month's UK Trade publication. The statement detailing the omission of these data can be found on the ONS website.

Key figures

Table 1: Balance of UK Trade in goods and services

Fig 1: Balance of UK Trade

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Fig 2: Balance of UK Trade in goods

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Supplementary Analysis page

Note: Month-on-month growth rates can be volatile. To interpret the underlying movements in the data, users are advised to look at a longer time period.

The UK’s deficit in Trade in Goods and Services narrowed to £1.5 billion in July, down from £4.3 billion in June.

The UK’s surplus in Trade in Services was estimated at £5.6 billion in July. Exports of services were £15.6 billion and imports of services were £10.0 billion.

The UK’s deficit in Trade in Goods narrowed to £7.1 billion in July, down from £10.1 billion in June. Exports of goods increased by £2.2 billion (9.3 per cent), from £23.6 billion in June to £25.8 billion in July. Imports of goods fell by £0.7 billion (2.1 per cent), from £33.6 billion in June to £32.9 billion in July.

EU

The deficit in trade in goods with EU countries narrowed by £0.7 billion to £4.3 billion in July, compared with the deficit of £5.0 billion in June, as exports increased by £0.9 billion (7.7 per cent) to £12.5 billion, and imports increased by £0.2 billion (1.1 per cent) to £16.8 billion.

Non-EU

The deficit on trade in goods with non-EU countries decreased by £2.2 billion to £2.9 billion in July, compared with the deficit of £5.1 billion in June, as exports increased by £1.3 billion (11.0 per cent) to £13.2 billion and imports fell by £0.9 billion (5.3 per cent) to £16.1 billion.

Exports

 The increase in total exports of goods was driven by higher exports of the following commodities:

• Oil (up £0.8 billion), particularly to EU countries including the Netherlands.

• Semi manufactured goods other than chemicals (up £0.2 billion), particularly to non-EU countries.

• Chemicals (up £0.3 billion), particularly to non-EU countries including the USA.

• Consumer goods other than cars (up £0.3 billion), particularly to non-EU countries.

Imports

The decrease in total imports of goods was driven by lower imports of the following commodities:

• Semi manufactured goods other than chemicals (down £0.4 billion), particularly from non-EU countries.
• Consumer goods other than cars (down £0.3 billion) particularly from non-EU countries.
• Chemicals (down £0.3 billion), particularly from EU countries including Germany.
• Oil (down £0.2 billion).

Volumes

The volume of exports of goods (excluding oil and erratics) between June and July increased by 6.7 per cent, driven by an increase in export volumes of consumer goods other than cars (up 17.6 per cent), semi-manufactures other than chemicals (up 12.3 per cent), chemicals (up 8.8 per cent) and food, drink and tobacco (up 8.4 per cent).

The volume of imports of goods (excluding oil and erratics) fell by 1.6 per cent, driven by a fall in import volumes of semi manufactured goods other than chemicals (down 11.1 per cent), consumer goods other than cars (down 7.6 per cent) and chemicals (down 6.3 per cent). This was partially offset by an increase in import volumes of cars (up 11.9 per cent) and of food, drink and tobacco (up 5.0 per cent). 

Value of UK trade in goods

In July, the UK’s deficit on trade in goods was £7.1 billion, £2.9 billion less than in June. Total exports increased by £2.2 billion (9.3 per cent) to £25.8 billion and total imports fell by £0.7 billion (2.1 per cent) to £32.9 billion. At the commodity level:

Table 2: Change in key commodity value, July 12 compared with June 12

In the three months ending July 2012, the deficit on trade in goods was £25.2 billion, compared with a deficit of £27.5 billion in the three months ending April 2012. Total exports increased by £0.2 billion (0.3 per cent) to £75.3 billion and total imports fell by £2.2 billion (2.1 per cent) to £100.4 billion. At the commodity level:

Table 3: Change in key commodity value from May 12 - July 12 compared with February - April 12

Fig 3: Value of UK Trade in goods

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Fig 4: Value of UK Trade in goods excluding oil

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Trade in goods - EU analysis

In July, the deficit on trade in goods with EU countries fell by £0.7 billion to £4.3 billion. Exports to the EU increased by £0.9 billion (7.7 per cent) to £12.5 billion and imports from the EU increased by £0.2 billion (1.1 per cent) to £16.8 billion. At the commodity level:

Table 4: Change in key commodity value (EU) from July 2012 compared with June 2012

In the three months ending July 2012, the deficit on trade in goods with EU countries was little changed on the preceding three months, at £13.5 billion, compared with a deficit of £13.4 billion in the three months ending April 2012. Exports to the EU fell by £1.4 billion (3.6 per cent) to £36.9 billion and imports from the EU fell by £1.3 billion (2.5 per cent) to £50.4 billion. At the commodity level:

Table 5: Change in key commodity value (EU) from May 12 - July 12 compared with February 12 - April 12

Fig 5: Balance of Trade in goods with EU countries

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Trade in goods - non-EU analysis

In July, the deficit on trade in goods with non-EU countries decreased by £2.2 billion to £2.9 billion. Exports to non-EU countries increased by £1.3 billion (11.0 per cent) to £13.2 billion and imports from non-EU countries fell by £0.9 billion (5.3 per cent) to £16.1 billion. At the commodity level:

Table 6: Change in key commodity value (non-EU), July 2012 compared with June 2012

In the three months ending July 2012, the deficit on trade in goods with non-EU countries decreased by £2.5 billion to £11.6 billion, compared with a deficit of £14.1 billion in the three months ending April 2012. Exports to non-EU countries increased by £1.6 billion (4.3 per cent) to £38.3 billion and imports from non-EU countries fell by £0.9 billion (1.7 per cent) to £50.0 billion. At the commodity level:

Table 7: Change in key commodity value (non-EU) from May 12 - July 12 compared with February 12 - April 12

Fig 6: Balance of Trade in goods with non-EU countries

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Trade in goods - one month geographical analysis

July 2012 compared with June 2012

Within EU countries, exports to France and the Netherlands both rose by £0.4 billion and exports to Spain rose by £0.1 billion. Among non-EU countries, exports to South Africa rose by £0.3 billion, exports to Switzerland and India both rose by £0.2 billion and exports to Canada rose by £0.1 billion. Within EU countries, imports from the Irish Republic fell by £0.2 billion. Among non-EU countries, imports from Norway fell by £0.4 billion, imports from Japan and South Korea both fell £0.1 billion and imports from Nigeria rose by £0.1 billion.

Table 8: Change in monthly trade with significant partner countries, July 2012 compared with June 2012

Fig 7: Significant partner country 1 month balances

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Trade in goods – three month geographical analysis

Three months ending July 2012 compared with three months ending April 2012

Within EU countries, exports to the Netherlands fell by £0.6 billion and exports to Germany fell by £0.5 billion. Among non-EU countries, exports to China rose by £0.4 billion. Within EU countries, imports from Belgium & Luxembourg fell by £0.4 billion and imports from the Irish Republic and Denmark both fell by £0.3 billion. Among non-EU countries, imports from Norway fell by £1.3 billion and imports from China rose by £0.6 billion. 

Table 9: Change in three monthly trade with significant partner countries from May 12 - July 12 compared with February 12 - April 12

Fig 8: Significant partner country three monthly balances from May - July 2012

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Volume of total trade in goods (excluding oil and erratics)

Between June and July, the volume of exports increased by 6.7 per cent and the volume of imports fell by 1.6 per cent, compared with June. At the commodity level:

Table 10: Change in key commodity volume, July 2012 compared with June 2012

In the three months ending July 2012, the volume of exports increased by 0.9 per cent and the volume of imports fell by 0.8 per cent, compared with the three months ending April 2012.  At the commodity level:

Table 11: Change in key commodity volume from May 12 - July 12 compared with February 12 - April 12

Fig 9: Volume of exports of goods (finished manufactures) from May 12 - July 12 compared with February 12 - April 12

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Fig 10: Volume of imports of goods (finished manufactures) from May 12 - July 12 compared with February 12 - April 12

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Export and import prices for trade in goods (not seasonally adjusted)

As ONS previously announced in its statement on 3 July 2012, exports and imports price indices data are not available in this month's UK Trade publication.

The statement detailing the omission of these data can be found on the ONS website.

Trade in oil

In July, the balance on trade in oil was in deficit by £0.6 billion, compared with a deficit of £1.6 billion in June. Oil exports increased by £0.8 billion to £3.5 billion and oil imports fell by £0.2 billion to £4.0 billion. In the three months ending July 2012, the balance on trade in oil was in deficit by £2.9 billion, compared with a deficit of £3.3 billion in the three months ending April 2012. Oil exports fell by £0.2 billion to £10.0 billion and oil imports fell by £0.7 billion to £12.8 billion.

Fig 11: Balance of Trade in oil, July 2012

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Trade in services

Note: Most components of Trade in Services are collected quarterly and the latest period for which reasonable quality estimates are available is the second quarter of 2012. In order to provide a more complete picture of trade, the latest available data has been extrapolated into July.

In July, the UK’s estimated surplus on trade in services was £5.6 billion.

Exports in July 2012 were estimated to have been £15.6 billion and imports £10.0 billion.

In the three months to July 2012, the estimated surplus on trade in services was £17.1 billion.

Total exports were £47.0 billion and total imports were £29.9 billion.

Fig 12: Value of UK Trade in services

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Records Sheet

The UK Trade record information for July 2012 can be accessed at the ONS Website .

Background notes

1. What's New?

   Revisions

   This release conforms to the standard revisions policy for National Accounts.  In this release, periods from January 2011 are open for revision. 

2. MTIC

   Users should also be aware that for some data prior to April 2012, the monthly data does not sum precisely to the quarters for the MTIC series due to rounding.

3.  

   UK Trade designated as National Statistics

   The United Kingdom Statistics Authority has designated these statistics as National Statistics, in accordance with the Statistics and Registration Service Act 2007 and signifying compliance with the Code of Practice for Official Statistics.

   Designation can be broadly interpreted to mean that the statistics:

   • meet identified user needs,

   • are well explained and readily accessible,

   • are produced according to sound methods, and

   • are managed impartially and objectively in the public interest.

   Once statistics have been designated as National Statistics it is a statutory requirement that the Code of Practice shall continue to be observed.

4. Special Events

   An article outlining the ONS policy on special events is available.

   Olympic and Paralympics

   The Olympics took place from 27 July to 12 August 2012 (with a few events starting on 25 July). The Paralympics began on 29 August and continue to 9 September. For most economic statistics, any direct effect of the Olympics will be mainly seen in the August estimates. Some July estimates may also be affected, particularly:

   • Changes to travel patterns.

   • Additional short-term employment connected with the Olympics.

   • Inclusion of a proportion of ticket receipts in output and overseas trade

   • Wider effects, for example if the presence of the Olympics has influenced the number of non-Olympics tourist visits, may of course affect any of the summer months.

   This commentary is intended to help users to interpret the statistics in the light of events. As explained in ONS's Special Events policy, it is not possible to make an estimate of the effect of the Olympics and Paralympics on particular series only on the basis of information collected in those series. More details of certain series affected are in an Information Note, and an article explaining how various elements are reflected in National Accounts was published in July 2012.

5. Code of Practice for Official Statistics

   National Statistics are produced to high professional standards set out in the Code of Practice for Official Statistics. They undergo regular quality assurance reviews to ensure that they meet customer needs. They are produced free from any political interference. © Crown copyright 2012.

6. Understanding the data

   Short Guide to UK Trade

   Ever since statistics on exports and imports of goods were first collected in 1697 UK trade has been one of the country’s key economic indicators.

   All information included in the monthly UK Trade Statistical Bulletin is on a Balance of Payments (BoP) basis and is seasonally adjusted. The release contains tables showing the total value of trade in goods together with index numbers of volume and price, figures analysed by broad commodity group (values and indices) and according to geographical area (values only). In addition the Trade statistical bulletin also includes early monthly estimates of the value of trade in services.

   Data appearing in the UK Trade statistical bulletin are also used as a direct input into the quarterly Balance of Payments and National Accounts.

   Interpreting the data

   Monthly commodity movements for Food, beverages and tobacco, Basic materials, Fuels other than oil, and Erratics (Ships, Aircraft, Precious stones, and Silver) are only detailed in this Statistical Bulletin where they are equal to or exceed £200 million (£400 million for three monthly comparisons). Monthly country movements are only detailed in this Statistical Bulletin where they are equal to or exceed £0.1 billion (£0.3 billion for three monthly comparisons).

   In months where quarterly and three monthly ending percentage changes for index data coincide there may be small differences between the data for methodological reasons. Quarterly data are the indexed form of an underlying constant price (for volume indices) or consistent quantity (for price indices) series. Three month ending data are the average of the index data in that period.

   VAT Missing Trader Intra Community (MTIC) fraud

   Import figures for trade in goods include adjustments to allow for the impact of VAT MTIC fraud. The adjustments to trade in goods relate only to part of the carousel version of VAT MTIC fraud. This fraud leads to under recording of imports as fraudsters import goods from the EU, which they then sell on before disappearing without paying VAT on that sale. The goods are eventually exported. Such exports are declared and are therefore already reflected in the UK’s trade in goods statistics.

   Changes to the pattern of trading associated with MTIC fraud can make it difficult to analyse trade by commodity group and by country as changes in the impact of activity associated with this fraud affect both imports and exports. However, the MTIC trade adjustments are added to the EU import estimates derived from Intrastat returns as it is this part of the trading chain that is not generally recorded. In particular, adjustments affect trade in capital goods and intermediate goods - these categories include mobile phones and computer components, which are still the most widely affected goods.

   International convention determines that the treatment of the impact is to adjust imports upwards by the relevant amounts of missing declarations (non-response). However, users may wish to interpret short term movements in imports excluding that part of the fraudulent activity that is not included in the import estimates, and for this purpose an analysis of the import figures with the VAT MTIC adjustments excluded is shown in Table 13.

   Definitions and explanations

   A glossary of terms is published in the UK Balance of Payments Pink Book 2012.

   Use of the data

   UK Trade is a key economic indicator due to the importance of international trade to the UK economy. It is also a very timely statistic, providing an early indicator of what is happening more generally in the economy.

   In addition, it is a major component of two other key economic statistics – UK Gross Domestic Product (GDP) and the UK Balance of Payments. This means that there is a threefold potential for UK Trade statistics to inform the Government’s view of the UK economy, as well as the views of others, such as economists, City analysts, academics, the media, and international organisations.

   Notes on tables – rounding:

   The sum of constituent items in tables do not always agree exactly with the totals shown due to rounding.

   Symbols

   ..    Not applicable.

   -     Nil or less than half the final digit shown.

7. Methods

   Composition of the data

   Detailed methodological notes are published in the UK Balance of Payments (Pink Book).

   Seasonal adjustment

   Seasonal adjustment aims to remove effects associated with the time of the year or the arrangement of the calendar so that movements within a time series may be more easily interpreted.

   Deflation

   It is common for the value of a group of financial transactions to be measured in several time periods. The values measured will include both the change in the volume sold and the effect of the change of prices over that year. Deflation is the process whereby the effect of price change is removed from a set of values.

   Chain-linked indices (chained volume measures) which are indexed to form the volume series in this bulletin differ from fixed base indices in that the growth from one year to the next is estimated by weighting the components using the contribution to value of trade in the immediately preceding year(effectively re-basing every year). This series of annually re-weighted annual growths is then ‘chain-linked’ to produce a continuous series.

   The implied price deflators derived by comparing current price data to chained volume measures data are not the same as the price indices published in this statistical bulletin because the former are current weighted while the latter are base (2009) weighted.

   Changes in trade associated with VAT MTIC fraud mean that comparisons of volume and prices (both including and excluding trade associated with VAT MTIC fraud) should be treated with a great deal of caution.

   A paper, Statistics on Trade in Goods (GSS Methodological Series No. 36) describing the adjustments that need to be applied to conform to IMF definitions for Balance of Payments and the division of responsibility between ONS and HMRC is available on the National Statistics website.

   The Overseas Trade Statistics (OTS) data used as inputs to this statistical bulletin are collected and published by Her Majesty’s Revenue and Customs (HMRC) on an International Merchandise Trade Statistics (IMTS) basis.

8. Quality

   Basic quality information

   Accuracy: Trade in goods figures for the most recent months are provisional and subject to revision in the light of (a) late trader data, revisions to trade prices and revised estimates of trading associated with VAT MTIC fraud, and (b) revisions to seasonal adjustment factors which are re-estimated every month.

   Trade in services estimates have been derived from a number of monthly and quarterly sources. For components where no monthly data are available, estimates have been derived on the basis of recent trends. The results should be used with appropriate caution, as they are therefore likely to be less reliable than those for trade in goods. More details of the data sources, estimation methodology and reliability of the monthly estimates of trade in services were set out in Economic Trends (January 1996 and September 1997).

   Reliability: Revisions to data provide one indication of the reliability of key indicators. The table below shows summary information on the size and direction of the revisions which have been made to the data covering a five year period. A statistical test has been applied to the average revision to find out if it is statistically significantly different from zero. An asterisk (*) shows that the test is significant. An article explaining the past revisions performance for UK Trade statistics and what is being done to improve the first published estimates was published on 9 May 2005 on the National Statistics website.

   Table 12: Revisions Analysis UK Trade, July 2012

    

   			£million
   		Revisions between first publication and estimates twelve months later
   	Value in latest period	Average over the last 5 years (mean revision)	Average over the last 5 years without regard to sign (average absolute revision)
   Total trade exports (IKBH)	41396	756	1 011
   Total trade imports (IKBI)	42913	266	642
   Total trade balance (IKBJ)	-1517	489	618

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   The table covers estimates of UK trade first published from September 2006 (for July 2006) to August 2011 (for June 2011). Revisions spreadsheets giving these estimates and the calculations behind the averages in the table is available on the National Statistics website.

   An article analysing past revisions to quarterly balance of payments current account data was published in the May 2007 edition of Economic & Labour Market Review. It is available on the National Statistics website.

   More information about revisions material in this Statistical Bulletin can be found on the National Statistics website.

9. Coherence - EU enlargement and country coverage: Two more countries joined the EU from 1 January 2007. These countries were Bulgaria and Romania. In addition, the coverage of the Economic and Monetary Union (EMU) countries was extended to include Slovenia. In order to enable users to make long-run comparisons, data for the new definition EU and non-EU was produced from January 1998 onwards for value, and from January 1999 onwards for volume and price indices. At the same time data for the old definitions were no longer maintained. There are additional series for country groupings on the old definitions.

   The coverage of EMU countries was extended to cover Cyprus and Malta from July 2008, Slovakia from January 2009, and Estonia from January 2011. Some EU and non-EU breakdowns of commodity data for Chained Volume Measures which are available from the Statbase® service may be less reliable than the current price data. Please consult Stephen Curtis on 01633 456626 if you are considering using them.

   Data have been combined for the United States and Puerto Rico, and for Dubai, Abu Dhabi, and Sharjah (the United Arab Emirates) from January 2009 onwards. Estimates are separately available for the United States and Dubai up until the end of 2008 on request.

    

10. Summary quality report

    A Summary Quality Report for this Statistical Bulletin and associated data can be found on the National Statistics website.

11. National Accounts revisions policy

    National Accounts revision policy can be found on the National Statistics website.

12. Revisions

    Revisions Table 14R shows revisions to the main aggregates since the last Trade Statistical Bulletin of 9 August 2012. The revisions to trade in goods from January 2011 reflect revised data from Her Majesty’s Revenue and Customs and other data suppliers, revised estimates of trading associated with VAT MTIC fraud, later survey data on trade prices and a re-assessment of seasonal factors. 

    Revisions to trade in services, from April 2012 onwards, bring the data in-line with the Quarterly National Accounts (2nd Quarter 2012) published on 24 August 2012.

13. Publication policy

    Details of the policy governing the release of new data are available from the Media Relations Office. Also available is a list of the organisations given pre-publication access to the contents of this bulletin.

14. Accessing data

    Supplementary commodity data for this Statistical Bulletin (Monthly Review of External Trade Statistics); and quarterly data analysed by industry according to the Classification of Product by Activity 08 (UK Trade in Goods Analysed in Terms of Industries) are also available free of charge as PDF files.

    The complete run of data in the tables of this Statistical Bulletin are also available to view and download in other electronic formats free of charge using the ONS Time Series Data website service. Users can download the complete Statistical Bulletin in a choice of zipped formats, or view and download their own selections of individual series.

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18. Next publication:  Tuesday 9 October 2012

    Issued by: Office for National Statistics, Government Buildings, Cardiff Road, Newport NP10 8XG.

    Media contact: Luke Croydon Tel: 0845 6041858

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19. Details of the policy governing the release of new data are available by visiting www.statisticsauthority.gov.uk/assessment/code-of-practice/index.html or from the Media Relations Office email: media.relations@ons.gsi.gov.uk

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