UK Trade: May 2015

• UK Trade shows the extent of import and export activity and is a main contributor to the overall economic growth of the UK. All data are shown on a seasonally adjusted balance of payments basis at current prices

• The UK’s deficit on trade in goods and services was estimated to have been £0.4 billion in May 2015, compared with £1.8 billion in April 2015. This reflects a deficit of £8.0 billion on goods, partially offset by an estimated surplus of £7.6 billion on services. This deficit is the smallest since June 2013 and the narrowing is a result of imports decreasing by £1.4 billion to £43.4 billion, as exports were unchanged at £43.0 billion

• Imports of goods decreased by £1.4 billion in May 2015 to £32.6 billion, the lowest level since April 2011. Most notable decreases were evident in the imports of ships (£0.5 billion) and material manufactures (£0.4 billion)

• In the 3-months to May 2015, the UK’s deficit on trade in goods and services was estimated to have been £5.4 billion; narrowing by £1.4 billion from the 3-months to February 2015

• In the 3-months to May 2015, the trade in goods deficit narrowed by £1.9 billion to £28.1 billion. Exports increased by £0.6 billion to £73.1 billion, attributed to an increase in exports of chemicals to countries outside the EU. Imports decreased by £1.4 billion to £101.2 billion over the same period, attributed mainly to decreases in imports of chemicals and material manufactures

• In the 3-months to May 2015, exports to countries outside the EU increased by £1.7 billion, attributed to exports of chemicals which reached a record high of £7.3 billion. Over the same period, the UK's trade in goods surplus with the USA was at a record high of £4.0 billion

The deficit of trade in goods and services for May 2015 was £0.4 billion, narrowing by £1.4 billion from £1.8 billion when compared with April 2015. The trade position reflects exports minus imports.

The deficit is the smallest since June 2013 and this narrowing is a result of imports decreasing by £1.4 billion to £43.4 billion, as exports were unchanged at £43.0 billion in May 2015.

The monthly changes were attributed to trade in goods as the deficit narrowed by £1.4 billion to £8.0 billion, compared with the surplus on services which increased by £0.1 billion to £7.6 billion in May 2015.

In detail, exports of goods were £24.6 billion in May 2015, unchanged from April 2015, however there were offsetting movements in different commodities. Exports of fuels (specifically oil) increased by £0.5 billion and unspecified goods increased by £0.4 billion, whereas exports of chemicals decreased by £0.3 billion, miscellaneous manufactures (which includes jewellery and works of art) decreased by £0.4 billion and material manufactures decreased by £0.2 billion.

Imports of goods decreased by £1.4 billion in May 2015 to £32.6 billion, the lowest level of imports since April 2011. Imports decreased for all of the main commodity groups including a £0.5 billion decrease in imports of ships and a £0.4 billion decrease attributed to material manufactures.

In May 2015, the trade in goods deficit with the EU narrowed by £0.6 billion to £6.4 billion as imports decreased. The trade in goods deficit with countries outside the EU narrowed £0.8 billion to £1.6 billion, the smallest deficit since June 2013, again attributed to a decrease in imports.

Trade statistics for any 1 month can be erratic. For that reason, it is recommended to compare the latest 3-months against the preceding 3-months and the same 3-months of the preceding year.

In the 3-months ending May 2015, the total trade deficit narrowed by £1.4 billion to £5.4 billion as exports increased and imports decreased.

In the 3-months to May 2015, the trade in goods deficit narrowed by £1.9 billion to £28.1 billion. Exports increased by £0.6 billion to £73.1 billion in the 3-months to May 2015, attributed to an increase in exports of chemicals to countries outside of the EU.

Imports decreased by £1.4 billion to £101.2 billion in the 3-months to May 2015, the lowest since the 3-months to June 2011. Imports of chemicals and material manufactures decreased by £0.5 billion and £0.3 billion respectively, over the period. Despite a decrease in imports of most commodities, imports of cars increased by £0.5 billion in the 3-months to May 2015, reaching a record high of £7.9 billion. Imports of oil also increased by £0.5 billion in the 3-months to May 2015.

By area, the UK’s deficit with the EU narrowed by £1.0 billion to £20.7 billion in the 3-months to May 2015, as imports decreased more than exports. In contrast, both exports and imports to countries outside the EU increased, resulting in a narrowing of the trade in goods deficit with countries outside the EU of £0.9 billion to £7.4 billion.

For the 3-months to May 2015, exports of goods to EU countries decreased by £1.2 billion reflecting decreases in oil and semi-manufactured goods (both of £0.6 billion). In contrast, exports to countries outside the EU increased by £1.7 billion, attributed to exports of chemicals, which reached a record high of £7.3 billion for the 3-months to May 2015.

Geographically, in the 3-months to May 2015, the UK’s surplus with the USA was at a record high of £4.0 billion, an increase of £1.2 billion when compared with the 3-months to February 2015. This can be attributed mainly to an increase in exports of chemicals and fuels (specifically oil). The UK’s deficit with Switzerland widened by £1.5 billion, as exports decreased by £1.1 billion. In contrast, the UK’s deficit with France narrowed by £0.9 billion in the 3-months to May 2015, when compared with the 3-months to February 2015.

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 £22.9 billion for quarter 1 January to March 2015. Financial services, at record high of £10.3 billion, were the largest contributor to this surplus.

Between quarter 4 October to December 2014 and quarter 1 January to March 2015, exports of services rose £0.2 billion to a record high of £55.2 billion. The increase mainly reflects a £1.0 billion rise in transport. Imports of services rose by £0.5 billion to £32.3 billion in quarter 1 January to March 2015, attributed to increases in financial services (£0.3 billion) and intellectual property (£0.3 billion).

By area, in quarter 1 January to March 2015, exports to countries within the EU rose by £0.5 billion to £20.6 billion, which was a record high since comparable records began in 1999.

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 May 2015, the UK’s deficit on trade in goods was £8.0 billion, narrowing by £1.4 billion from April 2015.

Total exports decreased by £14.0 million (0.1%) to £24.6 billion and total imports decreased by £1.4 billion (4.1%) to £32.6 billion.

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

In the 3-months to May 2015, the deficit on trade in goods was £28.1 billion, narrowing by £1.9 billion from the 3-months to February 2015.

Total exports increased by £0.6 billion (0.8%) to £73.1 billion and total imports decreased by £1.4 billion (1.3%) to £101.2 billion.

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

Monthly analysis

In May 2015, the deficit on trade in goods with EU countries narrowed by £0.6 billion to £6.4 billion. The deficit on trade in goods with non-EU countries narrowed by £0.8 billion to £1.6 billion (Figure 4).

Between April 2015 and May 2015, exports to the EU decreased by £35.0 million (0.3%) to £11.2 billion.

Between April 2015 and May 2015, imports from the EU decreased by £0.6 billion (3.3%) to £17.6 billion. Imports from Germany decreased by £0.3 billion and imports from Finland, France and Sweden all decreased by £0.1 billion.

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

Between April 2015 and May 2015, exports to non-EU countries increased by £21.0 million (0.2%) to £13.5 billion.

Between April 2015 and May 2015, imports from non-EU countries decreased by £0.8 billion (5.1%) to £15.0 billion. Imports from South Korea decreased by £0.6 billion and from Switzerland by £0.4 billion. These decreases were partially offset by an increase in imports from China, Qatar and the USA, each of £0.2 billion.

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

3-monthly analysis

In the 3-months to May 2015, the deficit on trade in goods with EU countries narrowed by £1.0 billion to £20.7 billion.

Between the 3-months to February 2015 and the 3-months to May 2015, exports to the EU decreased by £1.2 billion (3.4%) to £33.4 billion. Exports to the Netherlands decreased by £0.7 billion and to Germany and the Irish Republic each by £0.2 billion. These decreases were partially offset by an increase in exports to France of £0.4 billion.

Between the 3-months to February 2015 and the 3-months to May 2015, imports from the EU decreased by £2.1 billion (3.8%) to £54.1 billion. Imports from France decreased by £0.5 billion, from the Irish Republic by £0.4 billion and from both Italy and the Netherlands by £0.3 billion.

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

In the 3-months to May 2015, the deficit on trade in goods with non-EU countries narrowed by £0.9 billion to £7.4 billion.

Between the 3-months to February 2015 and the 3-months to May 2015, exports to non-EU countries increased by £1.7 billion (4.6%) to £39.7 billion. Exports to the USA increased by £1.4 billion, to China by £0.4 billion and to India by £0.3 billion. These increases were partially offset by a decrease in exports to Switzerland of £1.1 billion.

Between the 3-months to February 2015 and the 3-months to May 2015, imports from non-EU countries increased by £0.8 billion (1.7%) to £47.1 billion. Imports from South Korea increased by £0.6 billion and from Switzerland by £0.4 billion. These increases were partially offset by a decrease in imports from Canada and Norway, each by £0.3 billion.

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

The UK’s top 10 export trading partners were unchanged in May 2015 when compared with April 2015.

Outside of the top 10, there were record highs in exports to Egypt and Mexico respectively. Although comparatively small value figures, the £0.1 billion increase in exports to Egypt represents a 105.3% increase when comparing May 2015 with April 2015. An increase of £24.0 million in exports to Mexico represents an 18.0% increase over the same period.

The UK’s top 5 import trading partners were also unchanged in May 2015 when compared with April 2015. Germany remains the top import partner with imports of £4.9 billion. Imports from the USA were at a record high of £3.0 billion. Anecdotal evidence suggests this £0.2 billion increase is due to a rise in the import of aircraft.

Outside of the top 10, imports from Poland were at a record high of £0.7 billion, representing a £49.0 million (7.3%) increase when May 2015 is compared with April 2015. Finland recorded a record low in imports with a decrease of £0.1 billion (33.0%) over the same period.

In the 3-months to May 2015, there were record highs in exports to the USA, Mexico and Saudi Arabia. Exports to the USA increased by £1.4 billion (12.2%) to £12.5 billion when comparing with the 3-months to February 2015. Over the same period, exports to Mexico increased by £0.1 billion (53.8%) to £0.4 billion and to Saudi Arabia by £0.1 billion (6.8%) to £1.2 billion.

In the 3-months to May 2015, imports from South Korea, the USA, New Zealand and Pakistan were all at a record high. Imports from South Korea increased by £0.6 billion (62.7%) to £1.5 billion when compared with the 3-months to February 2015. Over the same period, imports from the USA increased by £0.1 billion (1.7%) to £8.5 billion, from New Zealand by £0.1 billion (38.0%) to £0.3 billion and from Pakistan by £6.0 million (2.2%) to £0.3 billion.

Between April 2015 and May 2015, the total volume of exports decreased by 3.4% and the total volume of imports decreased by 3.5%.

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

In May 2015, compared with April 2015, export prices decreased by 0.5% and import prices decreased by 0.9%. Excluding the oil price effect, export prices decreased by 1.0% and import prices decreased by 0.9%.

In the 3-months to May 2015, when compared with the 3-months to February 2015, export prices and import prices both decreased by 0.4%. Excluding the oil price effect, export prices decreased by 1.0% and import prices decreased by 1.1%.

In May 2015, the balance on trade in oil was in deficit by £0.6 billion when compared with a deficit of £1.2 billion in April 2015. Oil exports increased by £0.5 billion to £2.1 billion and oil imports decreased by £0.1 billion to £2.7 billion.

In the 3-months to May 2015, the balance on trade in oil was in deficit by £3.1 billion, widening by £0.6 billion when compared with the 3-months to February 2015. Oil exports decreased by £0.2 billion to £5.4 billion and oil imports increased by £0.5 billion to £8.5 billion.

In May 2015, the UK’s estimated surplus on trade in services was £7.6 billion.

Exports in May 2015 were estimated to have been £18.4 billion and imports £10.8 billion.

In the 3-months to May 2015, the estimated surplus on trade in services was £22.7 billion.

In the 3-months to May 2015, exports were estimated to have been £55.2 billion and imports £32.5 billion.

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 quarterly data up to and including quarter 1 January to March 2015 are consistent with UKEA B tables and the Quarterly Balance of Payments.

In quarter 1 January to March 2015, the surplus on trade in services was £22.9 billion. Financial services, which at a record high of £10.3 billion, was the largest contributor to this surplus.

In quarter 1 January to March 2015, exports of services rose by £0.2 billion to a record high of £55.2 billion. The increase mainly reflects a £1.0 billion rise in transport. Additionally, record high exports were seen in financial (£13.1 billion), intellectual property (£3.4 billion), and telecommunication, computer and information services (£4.1 billion). For the same period, imports of services also rose by £0.5 billion to £32.3 billion. The main contributors to this increase were financial services (£0.3 billion) and intellectual property (£0.3 billion).

By area, in quarter 1 January to March 2015, exports of services to countries within the EU rose by £0.5 billion to £20.6 billion, which was a record high. Imports from the EU also rose by £0.5 billion in the same period to £16.0 billion.

The balance of trade in services with non-EU countries fell by £0.3 billion in quarter 1 January to March 2015 to £18.3 billion. This decrease reflects a fall in exports to the USA of £0.1 billion and imports from the USA of £0.2 billion. In quarter 1 January to March 2015, record high exports of services were seen in Japan (£1.5 billion) and China (£1.1 billion).

Revisions

Revisions to quarter 1 January to March 2015 mainly reflect updated estimates from the quarterly ONS International Trade in Services Survey and ONS International Passenger Survey. Exports were revised up by £0.2 billion and imports revised up by £0.5 billion.

Revisions to trade in services estimates for 2014 are due to updated transport survey information and administrative sources and a reassessment of seasonal factors, the surplus of services was revised upwards by £0.1 billion.

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