Statistical bulletin: UK Trade October 2011

UK Trade October 2011

• The UK’s deficit on seasonally adjusted trade in goods and services was £1.6 billion in October compared with the deficit of £4.3 billion in September.
• The deficit on seasonally adjusted trade in goods was £7.6 billion in October, compared with the deficit of £10.2 billion in September.
• The surplus on seasonally adjusted trade in services was estimated at £6.0 billion in October, compared with the surplus of £5.9 billion in September.
• Excluding oil and erratic items, the seasonally adjusted volume of exports was 9.0 per cent higher, but the volume of imports was 1.5 per cent lower in October, compared with September.
• Export prices of goods fell by 0.4 per cent and import prices of goods fell by 0.6 per cent, compared with September.

UK Trade in Goods Summary for October 2011

Balance of UK trade in goods October 2011

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Supplementary Analysis Page:

The UK’s deficit in Trade in Goods and Services decreased to £1.6 billion in October, down from £4.3 billion in September. This is the smallest deficit since April 2011, when the deficit was £1.5 billion.

The UK’s surplus in Trade in Services increased to £6.0 billion, up from £5.9 billion in September. Exports rose £0.2 billion to £15.4 billion whilst imports rose by less than £0.1 billion to reach £9.4 billion.

The UK’s deficit in Trade in Goods decreased to £7.6 billion, down from the record deficit of £10.2 billion in September. Exports rose to a record £26.5 billion and imports fell from September’s record £34.6 billion to £34.1 billion in October.

The £2.1 billion increase in exports of goods was made up of increased exports to EU countries of £13.9 billion (up £0.8 billion from September) and increased exports to non-EU countries of £12.6 billion (up £1.3 billion from September). Exports to non-EU countries were at a record level exceeding the previous record of £12.4 billion in February 2011.

The increase in total exports was driven by higher levels of exports of chemicals (up £0.6 billion) to both EU and non-EU countries, including increased exports of medical products to the USA. Exports of capital goods rose £0.3 billion, primarily to EU countries including higher exports of telecommunications equipment to France and Sweden. Exports of silver also rose £0.3 billion, mainly to non-EU countries including India.

The £0.5 billion decrease in total imports of goods was made up of lower imports from EU countries of £16.9 billion (down £0.6 billion from September) but increased imports from non-EU countries of £17.2 billion (up £0.1 billion from September). Imports from non-EU countries were at a record level exceeding the previous record of £17.0 billion in September 2011.

The decreased level of total imports was driven by lower levels of imports of chemicals (down £0.3 billion), specifically organic chemicals, and consumer goods other than cars (down £0.2 billion). The decline in consumer goods other than cars was driven by lower imports of clothing. These were offset by higher imports of oil (up £0.3 billion) as imports of oil other than crude oil increased.

Volume and Prices

The volume of exports of goods, excluding oil and erratics rose 9.0 per cent as export prices fell 0.4 per cent. In volume terms, exports of all key commodities, other than cars, rose. Primarily, exports of chemicals rose 15.0 per cent, while exports of consumer goods other than cars rose 14.6 per cent and capital goods rose 11.0 per cent.

Lower export prices were driven by lower prices of fuels (down 1.5 per cent) and basic materials (down 2.0 per cent). Export prices of intermediate goods fell 1.0 per cent.

The volume of imports of goods, excluding oil and erratics fell 1.5 per cent as import prices fell 0.6 per cent. In volume terms, imports of all key commodities other than cars, food, beverages & tobacco, and capital goods, fell. Imports of chemicals fell 6.0 per cent while imports of consumer goods other than cars fell 5.9 per cent and semi manufactured goods other than chemicals fell 4.5 per cent. This was offset by higher imports of cars (up 7.8 per cent).

Lower import prices were driven by lower prices of fuels, chemicals, food, drink & tobacco and capital goods (all down 1.0 per cent). Basic materials prices fell 2.5 per cent but this does not impact on the total import price index as much as it makes up only 3 per cent of the total value of imports.

Note:

Care should be taken when using the month-on-month growth rates due to their volatility.

Value of UK trade in goods (seasonally adjusted)

In October, the UK’s deficit on trade in goods narrowed by £2.6 billion to £7.6 billion, compared with the deficit of £10.2 billion in September.

Total exports rose by £2.1 billion (8.7 per cent) to £26.5 billion, but total imports fell by £0.5 billion (1.5 per cent) to £34.1 billion. At the commodity level:

In the three months ending October, the deficit on trade in goods widened by less than £0.1 billion to £26.4 billion, virtually unchanged compared with the deficit in the three months ending July.

Total exports rose by £0.5 billion (0.6 per cent) to £75.4 billion and total imports rose by £0.5 billion (0.5 per cent) to £101.8 billion. At the commodity level:

Value of UK trade in goods October 2011

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Value of UK trade in goods excluding oil October 2011

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Trade in goods - EU analysis (seasonally adjusted)

In October, the deficit on trade in goods with EU countries narrowed by £1.5 billion to £3.0 billion, compared with the deficit of £4.5 billion in September.

EU exports rose by £0.8 billion (6.2 per cent) to £13.9 billion, but EU imports fell by £0.6 billion (3.7 per cent) to £16.9 billion. At the commodity level:

In the three months ending October, the deficit on trade in goods with EU countries widened by £0.9 billion to £11.1 billion, compared with the deficit of £10.2 billion in the three months ending July 2011.

EU exports fell by £0.6 billion (1.5 per cent) to £40.2 billion but EU imports rose by £0.2 billion (0.5 per cent) to £51.3 billion. At the commodity level:

Balance of trade in goods - EU countries October 2011

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Trade in goods - non-EU analysis (seasonally adjusted)

In October, the deficit on trade in goods with non-EU countries decreased by £1.2 billion to £4.6 billion, compared with the deficit of £5.7 billion in September.

Non-EU exports rose by £1.3 billion (11.5 per cent) to £12.6 billion and non-EU imports rose by £0.1 billion (0.8 per cent) to £17.2 billion. At the commodity level:

In the three months ending October, the deficit on trade in goods with non-EU countries narrowed by £0.8 billion to £15.3 billion, compared with the deficit of £16.1 billion in the three months ending July.

Non-EU exports rose by £1.1 billion (3.1 per cent) to £35.2 billion and non-EU imports rose by £0.3 billion (0.5 per cent) to £50.6 billion. At the commodity level:

Balance on trade in goods - non-EU countries October 2011

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Trade in goods - one month geographical analysis (seasonally adjusted)

October 2011 compared with September 2011

Within the EU countries, exports to France rose by £0.4 billion. Among Non-EU countries, exports to India rose by £0.4 billion. (See background notes, ‘Interpreting the Data’).

Within the EU countries, imports from the Irish Republic fell by £0.2 billion. Among Non-EU countries, there were no import movements in excess of £0.2 billion. (See background notes, ‘Interpreting the Data’).

Significant partner country 1 month balances October 2011

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Trade in goods - quarterly geographical analysis (seasonally adjusted)

Three months ending October 2011 compared with the three months ending July 2011

Within the EU and Non-EU countries there were no export movements in excess of £0.4 billion (See background notes, ‘Interpreting the Data’).

Within the EU countries there were no import movements in excess of £0.4 billion (See background notes, ‘Interpreting the Data’). Among Non-EU countries, imports from Nigeria and the USA rose by £0.5 billion. Imports from Russia fell by £0.4 billion.

Significant partner country 3 month balances October 2011

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

In October, the volume of exports rose by 9.0 per cent but the volume of imports fell by 1.5 per cent, compared with September. At the commodity level:

In the three months ending October, the volume of exports rose by 2.2 per cent but the volume of imports fell by 0.6 per cent, compared with the three months ending July. At the commodity level:

Volume of exports of goods (finished manufactures) 3 months ending October 2011

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Volume of imports of goods (finished manufactures) 3 months ending October 2011

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

In October, export prices fell by 0.4 per cent and import prices fell by 0.6 per cent, compared with September. This led to an increase in the terms of trade. Excluding the oil price effect, export prices fell by 0.3 per cent and import prices fell by 0.5 per cent.

In the three months ending October, export prices fell by 0.3 per cent but import prices rose by 1.1 per cent. This led to a decrease in the terms of trade. Excluding the oil price effect, export prices fell by 0.1 per cent but import prices rose by 1.4 per cent.

 

Export and import prices (goods) October 2011

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Export and import price (goods) - excluding oil price effect October 2011

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Trade in oil (seasonally adjusted)

In October, the balance on trade in oil was in deficit by £1.6 billion, compared with a deficit of £1.4 billion in September. Oil exports rose by less than £0.1 billion to £2.9 billion and oil imports rose by £0.3 billion to £4.5 billion.

In the three months ending October, the balance on trade in oil was in deficit by £4.3 billion, compared with the deficit of £3.0 billion in the three months ending July. Oil exports fell by £1.0 billion to £8.5 billion but oil imports rose by £0.2 billion to £12.8 billion.

Balance on trade in oil October 2011

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Trade in services (seasonally adjusted)

In October, the UK’s estimated surplus on trade in services rose to £6.0 billion.

Exports rose by £0.2 billion (1.2 per cent) to £15.4 billion and imports rose by less than £0.1 billion (0.6 per cent) to £9.4 billion.

In the three months ending October, the estimated surplus on trade in services narrowed by £0.1 billion to £17.8 billion, compared with the surplus of £18.0 billion in the three months ending July.

Total exports fell by £0.5 billion (1.2 per cent) to £45.9 billion and total imports fell by £0.4 billion (1.4 per cent) to £28.1 billion.  

Value of UK trade in services October 2011

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Records Sheet

UK trade record information for October 2011 can be accessed here.

UK Trade pre release list October 2011

UK trade pre release list can be found here.

Background notes

1. What’s new?

   Publication of revised Price Indices
   Following further quality assurance, price index data has been revised back to 1998. Investigation into large movements in the indices for manufactured goods has led to deflator improvements.
   This revision does not affect lead current price and volume data.
   Publication of Classification of Products by Activity (CPA08)
   Time Series Data detailing trade according to the Classification of Products by Activity (CPA08) are today published for the first time, supplementing the Standard International Trade Classification (SITC) data found in this bulletin. This brings UK Trade data in line with the product classification used to compile Blue Book 2011.
   The CPA is the classification of products at the level of the European Union. Product classifications are designed to categorize products that have common characteristics. They provide the basis for collecting and calculating statistics on the production, distributive trade, consumption, foreign trade and transport of such products. A major revision of the CPA was adopted in April 2008.  New concepts, such as originals and intellectual property products have been introduced, and further detail has been added to reflect new products. A correspondence table between the CPA02 and CPA08 classifications can be found at the following link.
   

2. 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 2011.

3. 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 £0.2 billion (£0.4 billion for three monthly comparisons).

   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).  
     
   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.

4. 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 (2008) 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 entitled Overseas Trade Statistics Methodology describing the basis on which trade in goods statistics are compiled is available on the UK Trade Info website:
     A further 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.
     

5. 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

   Revisions table October 2011

   		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)	41 886	872	1 128
   Total trade imports (IKBI)	43 438	651	1 008
   Total trade balance (IKBJ)	-1 552	229	533

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   The table covers estimates of UK trade first published from May 2005 (for March 2005) to July 2010 (for May 2010).  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

6. 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 Marilyn Thomas on 01633 455708 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 till the end of 2008 on request.

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

8. National Accounts revisions policy
   National Accounts revision policy is included here:

    

9. Revisions
   Table 14R shows revisions to the main aggregates since the last Trade Statistical Bulletin of 9 November 2011. The revisions to trade in goods from January 2010 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 data, from July 2011 onwards, bring the monthly data into line with the UK Output, Income and Expenditure Statistical Bulletin published on 24 November 2011.
   

10. 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.

    Additionally, in light of the timing of this month’s meeting of the Bank of England's Monetary Policy Committee, members of the committee have had pre-publication access to this bulletin in line with release protocols.

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

    
    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. The Time Series Data service can be accessed here.

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15. Next publication: 11 January 2012
    

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

    Media contact:  
    Luke Croydon               0845 6041858
    Emergency on-call        07867 906553
    Email  media.relations@ons.gsi.gov.uk

    Statistical contact:
    Tel Marilyn Thomas    01633 455708
    Email trade.in.goods@ons.gov.uk

    Contact us:
    Tel  0845 601 3034
    Email  info@ons.gov.uk
    Website www.ons.gov.uk

16. 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