UK Trade: March 2015

• UK Trade shows the extent of import and export activity and is a main contributor to the overall economic growth of the UK

• Seasonally adjusted, the UK’s deficit on trade in goods and services was estimated to have been £2.8 billion in March 2015, compared with £3.3 billion in February 2015. This reflects a deficit of £10.1 billion on goods, partially offset by an estimated surplus of £7.3 billion on services

• In quarter 1 January to March 2015, the UK's deficit on trade in goods and services was estimated to have been £7.5 billion; widening by £1.5 billion from the previous quarter

• In quarter 1 January to March 2015, the trade in goods deficit widened by £0.8 billion to £29.9 billion. The widening reflects a £2.7 billion fall in exports and a £1.9 billion fall in imports. At the commodity level, the fall in exports in quarter 1 reflects a £2.2 billion decrease in exports of fuels; specifically, oil exported to EU countries, which fell by £2.1 billion from the previous quarter. Over the same period, imports of fuels fell by £2.2 billion, reflecting a £1.8 billion fall in imports of oil from outside the EU

The deficit of trade in goods and services for March 2015 narrowed to £2.8 billion, from £3.3 billion in the previous month. The trade position reflects exports minus imports. Between February 2015 and March 2015, exports increased by £0.3 billion to £41.9 billion and imports decreased by £0.2 billion to £44.7 billion.

The deficit on trade in goods was £10.1 billion in March 2015, narrowing by £0.7 billion from February 2015. Exports rose by £0.3 billion between February 2015 and March 2015, whilst imports decreased by £0.4 billion over the same period.

In detail, exports of goods rose by £0.3 billion to £23.7 billion in March 2015. The increase mainly reflects a £0.4 billion rise in exports of manufactured goods; in particular, material manufactures (up £0.2 billion) and chemicals (up £0.2 billion). With the exception of unspecified goods which fell by £0.1 billion, exports of all main commodities rose in March 2015.

Imports of goods fell by £0.4 billion in March 2015, mainly reflecting a £0.3 billion decrease in imports of manufactured goods; specifically machinery and transport equipment which fell £0.4 billion due mainly to trade in aircraft and ships. The overall decrease in imports was partially offset by an increase in fuels, which rose by £0.2 billion.

In March 2015, exports to countries within the EU decreased by £0.3 billion. The fall was mainly attributed to fuels (specifically oil) and manufactured goods (specifically chemicals). Imports from EU countries fell by £0.9 billion between February 2015 and March 2015. Imports of manufactured goods fell by £0.7 billion; machinery and transport equipment, in particular, fell by £0.3 billion as imports of aircraft decreased. The fall in imports contributed to the narrowing of the UK’s deficit with the EU, which at £0.6 billion was the largest narrowing since March 2014.

Outside the EU, exports rose by £0.7 billion. Manufactured goods increased by £0.5 billion, as chemicals (specifically medicinal and pharmaceutical products) rose by £0.3 billion and miscellaneous and material manufactures each rose by £0.2 billion. Oil exports also rose in March 2015, up £0.2 billion from February 2015. The increase in exports was partially offset by a £0.6 billion rise in imports from countries outside of the EU, as imports of miscellaneous manufactures rose by £0.5 billion and fuel imports rose by £0.1 billion. These increases were partially offset by lesser falls elsewhere.

Trade statistics for any one month can be erratic. For that reason, it is recommended to compare the latest quarter against the preceding quarter and the same quarter of the preceding year.

In quarter 1 January to March 2015, the trade in goods deficit widened by £0.8 billion to £29.9 billion. The widening reflects a £2.7 billion fall in exports and a £1.9 billion fall in imports. At the commodity level, the fall in exports in quarter 1 reflects a £2.2 billion decrease in exports of fuels; specifically oil exported to EU countries, which fell by £2.1 billion from the previous quarter. Over the same period, imports of fuels fell by £2.2 billion as imports of oil from outside the EU fell by £1.8 billion. By area, the UK’s deficit with the EU widened by £1.6 billion to a record £21.5 billion, while the UK’s deficit with non-EU countries narrowed by £0.8 billion. These movements are representative of the UK’s trade in oil as exports to the EU and imports from outside the EU both decreased over the quarter.

Geographically, in quarter 1 January to March 2015, the UK’s deficit with the Netherlands widened by £1.1 billion, as exports fell by £1.2 billion; anecdotal evidence suggests the fall is mainly attributed to trade in oil. Elsewhere in the EU, the UK’s deficits with France and Belgium and Luxembourg (combined) widened as exports outperformed imports. Outside the EU, exports to the USA reached a record high £11.5 billion. Imports from the USA also increased, although less significantly, resulting in the UK’s quarterly surplus with the US rising by £1.9 billion. The UK’s deficit with Canada also improved over the quarter (narrowing by £1.6 billion) as exports increased and imports decreased.

This bulletin also reports on trade in services. However, the information on trade in services is mainly obtained from quarterly surveys, in some cases underpinned by larger annual surveys. That means that the data for the latest months are inevitably uncertain.

The surplus on trade in services was estimated to be £7.3 billion in March 2015; falling by £0.2 billion from the previous month. The fall in surplus reflects a slight decrease in exports and a £0.2 billion increase in imports.

In quarter 1 January to March 2015, the estimated surplus on trade in services was £22.4 billion. This represents a reduction of £0.8 billion in the surplus from the record high of £23.2 billion in the previous quarter. Exports of services decreased by £0.3 billion to £54.5 billion in quarter 1 January to March 2015 and imports increased by £0.4 billion to £32.1 billion.

The value of trade in goods grew steadily from the beginning of 2007 to mid-2008. The onset of the global economic downturn in mid-2008 affected the economic performance of the UK’s major trading partners and the value of both UK exports and imports fell sharply until quarter 2 April to June 2009. Growth in the value of trade in goods resumed from mid-2009 with improving global economic conditions. However, the value of both UK exports and imports has remained largely flat since mid-2011 with the continuing difficulties in many economies.

In March 2015, the UK’s deficit on trade in goods was £10.1 billion, narrowing by £0.7 billion from February 2015.

Total exports increased by £0.3 billion (1.4%) to £23.7 billion and total imports decreased by £0.4 billion (1.0%) to £33.9 billion.

At the commodity level, the data are shown in Table 2.

In quarter 1 January to March 2015, the deficit on trade in goods was £29.9 billion, widening by £0.8 billion from quarter 4 October to December 2014.

Total exports decreased by £2.7 billion (3.6%) to £71.6 billion and total imports decreased by £1.9 billion (1.9%) to £101.5 billion.

At the commodity level, the data are shown in Table 3.

Monthly analysis

In March 2015, the deficit on trade in goods with EU countries narrowed by £0.6 billion to £7.0 billion. The deficit on trade in goods with non-EU countries narrowed by £0.1 billion to £3.2 billion (Figure 4).

Between February 2015 and March 2015, exports to the EU decreased by £0.3 billion (2.9%) to £10.9 billion. Exports to the Netherlands decreased by £0.4 billion and to the Irish Republic by £0.1 billion. These decreases were partially offset by an increase in exports to both France and Germany of £0.1 billion.

Between February 2015 and March 2015, imports from the EU decreased by £0.9 billion (4.8%) to £17.9 billion. Imports from France decreased by £0.3 billion, from the Irish Republic by £0.2 billion and from Belgium and Luxembourg (combined), Czech Republic, Italy and the Netherlands by £0.1 billion.

At the commodity level, the data are shown in Table 4.

Between February 2015 and March 2015, exports to non-EU countries increased by £0.7 billion (5.4%) to £12.8 billion. Exports to both India and South Korea increased by £0.2 billion and to China, Hong Kong, Saudi Arabia, Switzerland and the USA by £0.1 billion. These increases were partially offset by a decrease in exports to both Brazil and Singapore of £0.1 billion.

Between February 2015 and March 2015, imports from non-EU countries increased by £0.6 billion (3.6%) to £16.0 billion. Imports from China increased by £0.2 billion and imports from Brazil, Canada, Qatar, Switzerland and Turkey all increased by £0.1 billion. These increases were partially offset by a decrease in imports from Norway of £0.3 billion.

At the commodity level, the data are shown in Table 5.

Quarterly analysis

In quarter 1 January to March 2015, the deficit on trade in goods with EU countries widened by £1.6 billion to £21.5 billion.

Between quarter 4 October to December 2014 and quarter 1 January to March 2015, exports to the EU decreased by £3.0 billion (8.3%) to £33.6 billion. Exports to the Netherlands decreased by £1.2 billion, to both Belgium and Luxembourg (combined) and the Irish Republic by £0.5 billion, to France by £0.3 billion and to Sweden by £0.2 billion.

Between quarter 4 October to December 2014 and quarter 1 January to March 2015, imports from the EU decreased by £1.5 billion (2.6%) to £55.1 billion. Imports from Italy decreased by £0.5 billion, from Germany by £0.4 billion, from Belgium and Luxembourg (combined) by £0.3 billion and from Denmark by £0.2 billion. These decreases were partially offset by an increase in imports from France of £0.2 billion.

At the commodity level, the data are shown in Table 6.

In quarter 1 January to March 2015, the deficit on trade in goods with non-EU countries narrowed by £0.8 billion to £8.4 billion.

Between quarter 4 October to December 2014 and quarter 1 January to March 2015, exports to non-EU countries increased by £0.4 billion (1.0%) to £38.0 billion. Exports to the USA increased by £2.2 billion, to South Korea by £0.3 billion and to Canada, Japan, Qatar, South Africa and the United Arab Emirates by £0.2 billion. These increases were partially offset by a decrease in exports to Switzerland of £2.5 billion, to China of £0.8 billion, to India of £0.4 billion, to Saudi Arabia of £0.3 billion and to Russia of £0.2 billion.

Between quarter 4 October to December 2014 and quarter 1 January to March 2015, imports from non-EU countries decreased by £0.4 billion (0.9%) to £46.4 billion. Imports from Canada decreased by £1.4 billion, from Norway by £0.5 billion and from India, Kuwait, Nigeria and United Arab Emirates by £0.2 billion. These decreases were partially offset by an increase in imports from China of £1.1 billion and from both the USA and Qatar of £0.3 billion.

At the commodity level, the data are shown in Table 7.

The UK's top 5 export trading partners were unchanged in March 2015 when compared with February 2015. An increase in exports to France of £0.1 billion and a decrease in exports to the Netherlands of £0.4 billion (Table 8), meant that France moved to the 3rd position and the Netherlands moved to the 5th position when compared with February 2015. Anecdotal evidence suggests this decrease to the Netherlands was due to the reduction in exports of crude oil.

Outside of the top 10, exports to Qatar were at a record high in March 2015, with a rise of £14.0 million (7.6%) when compared with February 2015.

The UK's top 5 import trading partners were also unchanged when compared with February 2015. Germany remains the UK's top import partner, with imports of £5.1 billion. Outside of the top 5, a £0.3 billion decrease in imports from Norway meant that it traded positions with Spain as the 9th largest import partner.

Outside of the top 10, imports to Turkey were at a record high in March 2015, with a rise of £0.1 billion (10.4%) when compared with February 2015.

In quarter 1 January to March 2015, there were record exports to the USA, the United Arab Emirates and Qatar. Exports to the USA increased by £2.2 billion (23.4%) to £11.5 billion, exports to the United Arab Emirates increased by £0.2 billion (15.6%) to £1.7 billion and exports to Qatar increased by £0.2 billion (48.8%) to £0.6 billion.

In quarter 1 January to March 2015, there were record imports from China. Imports from China increased by £1.1 billion (12.0%) to £9.9 billion.

Between February 2015 and March 2015, the total volume of exports decreased by 1.0% and the total volume of imports were unchanged.

At the commodity level, the data are shown in Table 10.

In quarter 1 January to March 2015, the volume of exports increased by 2.2% and the volume of imports increased by 2.3% when compared with the previous quarter.

At the commodity level, the data are shown in Table 11.

In March 2015, compared with February 2015, export prices increased by 0.7% and import prices were unchanged. Excluding the oil price effect, export prices increased by 0.4% and import prices decreased by 0.4%.

In quarter 1 January to March 2015, when compared with the previous quarter, export prices decreased by 3.1% and import prices decreased by 2.8%. Excluding the oil price effect, export prices decreased by 0.7% and import prices decreased by 0.5%.

In March 2015, the balance on trade in oil was in deficit by £1.1 billion, when compared with a deficit of £0.8 billion in February 2015. Oil exports increased by £0.1 billion to £1.7 billion and oil imports increased by £0.3 billion to £2.8 billion.

In quarter 1 January to March 2015, the balance on trade in oil was in deficit by £2.3 billion, narrowing by £0.1 billion when compared with the previous quarter. Oil exports decreased by £2.1 billion to £5.2 billion and oil imports decreased by £2.2 billion to £7.6 billion.

In March 2015, the UK’s estimated surplus on trade in services was £7.3 billion.

Exports in March 2015 were estimated to have been £18.1 billion and imports £10.8 billion.

In quarter 1 January to March 2015, the estimated surplus on trade in services was £22.4 billion.

In quarter 1 January to March 2015, exports were estimated to have been £54.5 billion and imports £32.1 billion.

The surplus on trade in services for March 2015 was estimated at £7.3 billion, which saw little movement when compared with February 2015, with very little change in the levels of exports (£18.1 billion) and a change in the level of imports (£10.8 billion) due to an increase in imports of insurance and pension services and other business services.

In quarter 1 January to March 2015, the estimated surplus on trade in services was £22.4 billion. This represents a reduction of £0.8 billion in the surplus from the record high of £23.2 billion in the previous quarter. Exports of services decreased by £0.3 billion to £54.5 billion in quarter 1 January to March 2015 and imports increased by £0.4 billion to £32.1 billion.

The UK Trade record information for March 2015 (35.5 Kb Excel sheet) can be accessed on our website.