UK Trade: June 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 £1.6 billion in June 2015, compared with £0.9 billion in May 2015. This reflects a deficit of £9.2 billion on goods, partially offset by an estimated surplus of £7.6 billion on services

• Exports of goods decreased by £0.3 billion to £24.9 billion in June 2015, mainly reflecting a £0.5 billion fall in exports of unspecified goods. Imports of goods increased by £0.5 billion to £34.1 billion over the same period, attributed to a £0.2 increase in fuels (specifically oil) and a cumulative rise in imports of almost all other commodities

• In quarter 2 April to June 2015, the UK’s deficit on trade in goods and services was estimated to have been £4.8 billion, narrowing by £2.7 billion when compared with quarter 1 January to March 2015

• In quarter 2 April to June 2015, the trade in goods deficit narrowed by £3.0 billion to £27.4 billion. Exports increased by £3.1 billion to £74.5 billion, attributed to an increase in chemical exports (£1.3 billion), exports of fuels (£1.0 billion) and machinery and transport equipment (£0.6 billion). Imports increased by £0.1 billion to £102.0 billion over the same period

• In quarter 2 April to June 2015, the trade in services surplus narrowed by £0.3 billion to £22.6 billion. There was a decrease of £0.1 billion in exports and a £0.2 billion increase in imports over the same period

Short guide to UK Trade

UK Trade shows the extent of import and export activity and is a key contributor to the overall economic growth of the UK. Trade is measured through both imports and exports of goods and/or services. Data is supplied from over 30 feeder sources including a variety of administrative data sources, the main one being HM Revenue & Customs (HMRC).

This monthly release contains tables showing the total value of trade in goods together with index numbers of volume and price. Figures are analysed by broad commodity group (values and indices) and according to geographical areas (values only). In addition the UK Trade statistical bulletin also includes early monthly estimates of the value of trade in services.

This bulletin focuses more on trade in goods due to the coverage and comprehensiveness of the administrative data sources available around goods, as well as its ability to be easily quantified and measured. Trade in services is harder to measure, and source data are provided mainly on a quarterly or annual basis principally from ITIS (International Trade in Service). Monthly estimates are created using this quarterly data on services, therefore the data are less robust on a monthly basis compared with goods.

All information included in the monthly UK Trade statistical bulletin is on a Balance of Payments (BoP) basis and is seasonally adjusted unless otherwise specified. Data appearing in the UK Trade statistical bulletin are also used as a direct input into the quarterly Balance of Payments and National Accounts.

Understanding UK Trade

We make every effort to provide informative commentary on the data in this release. Where possible, the commentary draws on evidence from other sources of information to help explain possible reasons behind the observed changes. However, in some instances it can prove difficult to elicit detailed reasons for movements, consequently, it is not possible for all data movements to be fully explained.

Trade statistics for any one 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 previous year.

When examining the trade in goods data, oil and “erratics” which are high value, low volume products, are removed from the analysis as they are extremely influential on trade in goods as a whole. Therefore we publish data inclusive and exclusive of these categories. We also provide a separate analysis of oil because it is subject to erratic price fluctuations and therefore volume is provided in metric tonnes as well as value (£ million).

UK Trade National Statistics suspension

Due to a series of errors during 2014, the UK Statistics Authority suspended the National Statistics designation of UK Trade on 14 November 2014. The Authority's reassessment of UK Trade against the Code of Practice for Official Statistics has been completed. We are committed to meeting the requirements and regaining National Statistics status for UK Trade as soon as possible and will keep users informed of progress.

One of the recommendations of the reassessment was to consult with users on the use of UK Trade statistics. The results of this user engagement survey can be found on our website.

During the next few months we will be improving this release and its associated commentary based on the Authority’s reassessment. We would welcome any feedback you might have on the improvements. To provide feedback on the bulletin please contact us via email trade.in.goods@ons.gov.uk.

Definitions and explanations

A glossary of terms is published in the UK Balance of Payments - The Pink Book, 2014.

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 2 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 does not always agree exactly with the totals shown due to rounding.

Symbols:

.. Not applicable

- Nil or less than half the final digit shown.

The deficit on trade in goods and services for June 2015 widened to £1.6 billion, from £0.9 billion in May 2015. The trade position reflects exports minus imports. Between May 2015 and June 2015, exports decreased by £0.2 billion to £43.2 billion and imports increased by £0.5 billion to £44.8 billion.

The deficit on trade in goods was £9.2 billion in June 2015; a widening of £0.8 billion from May 2015. Between May 2015 and June 2015, exports fell by £0.3 billion, whilst imports rose by £0.5 billion over the same period.

In detail, exports of goods fell by £0.3 billion to £24.9 billion in June 2015. The decrease mainly reflects a £0.5 billion fall in exports of unspecified goods following a high export value in the previous month. Exports of fuels also decreased in June 2015 (down £0.4 billion from May), £0.3 billion of this fall was due to oil. The overall decrease in exports of goods was partially offset by a £0.5 billion rise in chemicals, specifically organic chemicals.

Imports of goods rose by £0.5 billion to £34.1 billion in June 2015, £0.2 billion of this increase was attributed to fuels (specifically oil). The remaining increase was due to a cumulative rise in imports of almost all other commodities.

Between May 2015 and June 2015, exports to countries outside the EU fell by £0.3 billion. Exports of unspecified goods fell by £0.5 billion as trade levels returned to normal from May’s high, whilst exports of chemicals partly offset the decrease with a monthly increase of £0.3 billion. In the same period, imports from the EU rose by £0.6 billion, mainly reflecting increases in material manufactures, machinery and transport equipment, and food and live animals (each up by £0.1 billion). This increase in imports results in a record trade deficit with the EU of £7.6 billion for June 2015.

In quarter 2 April to June 2015, the total trade deficit narrowed by £2.7 billion to £4.8 billion, the smallest since quarter 2 April to June 2011. Exports rose by £2.9 billion and imports rose by £0.2 billion

In quarter 2 April to June 2015, the trade in goods deficit narrowed by £3.0 billion to £27.4 billion. The widening reflects a quarterly increase of £3.1 billion in exports and a £0.1 billion rise in imports. At the commodity level, the rise in exports reflects a £1.3 billion increase in exports of chemicals and a £1.0 billion rise in exports of fuels. Exports of machinery and transport equipment rose less significantly than chemicals and fuels over the quarter (up £0.6 billion), but accounted for £1.2 billion of the overall narrowing of the goods deficit as respective imports fell by £0.6 billion.

By area, the UK’s goods deficit with the EU widened by £0.2 billion to £22.0 billion in quarter 2 April to June 2015, while the UK’s deficit with non-EU countries narrowed by £3.2 billion over the same period. The quarterly narrowing of the non-EU deficit is the largest since quarter 4 October to December 2013 when the deficit narrowed by £5.3 billion and reflects individual £1.3 billion improvements in both the balance of trade in chemicals and trade in machinery and transport equipment.

Geographically, in quarter 2 April to June 2015, the UK’s deficit with China narrowed by £2.0 billion to £4.8 billion, while the UK’s surplus with the USA increased by £1.2 billion to £4.7 billion.

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.

In quarter 2 April to June 2015, the trade in services surplus narrowed by £0.3 billion to £22.6 billion. There was a decrease of £0.1 billion in exports and a £0.2 billion increase in imports over the same period.

Revisions

The total trade balance was revised downwards by £0.5 billion in both April 2015 and May 2015. Trade in goods accounts for almost all of the revisions to exports and imports in these months as new data have become available. Trade in services was largely unrevised in the same periods.

For the previous 5 months, revisions between the first and second estimate of the total trade balance have been in the same direction, a worsening of the trade balance. Investigating these revisions with HMRC has highlighted an improvement in our production process to use more up-to-date estimates.

The improvement to the process has been implemented this month, which generally over time should result in smaller revisions.

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 June 2015, the UK’s deficit on trade in goods was £9.2 billion, widening by £0.8 billion from May 2015. Total exports decreased by £0.3 billion (1.0%) to £24.9 billion and total imports increased by £0.5 billion (1.5%) to £34.1 billion.

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

In quarter 2 April to June 2015, the deficit on trade in goods was £27.4 billion, narrowing by £3.0 billion from quarter 1 January to March 2015.

Total exports increased by £3.1 billion (4.3%) to £74.5 billion and total imports increased by £0.1 billion (0.1%) to £102.0 billion.

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

Monthly analysis

In June 2015, the deficit on trade in goods with EU countries widened by £0.5 billion to £7.6 billion. The deficit on trade in goods with non-EU countries widened by £0.3 billion to £1.6 billion (Figure 4).

Between May 2015 and June 2015, exports to the EU increased by £0.1 billion (0.7%) to £11.6 billion. Exports to Germany, Italy and Sweden each increased by £0.1 billion. These increases were partially offset by £0.1 billion decreases in exports to both Belgium and Luxembourg (combined) and France.

Between May 2015 and June 2015, imports from the EU increased by £0.6 billion (3.0%) to £19.1 billion. Imports from Germany increased by £0.3 billion, with imports from Belgium and Luxembourg (combined) and Sweden each increasing by £0.1 billion.

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

Between May 2015 and June 2015, exports to non-EU countries decreased by £0.3 billion (2.4%) to £13.3 billion. There are a number of countries reporting a £0.1 billion decrease in exports this month including China, India and Japan. There were offsetting increases in exports to Switzerland and the USA, both of £0.2 billion.

Between May 2015 and June 2015, imports from non-EU countries decreased by £0.1 billion (0.4%) to £14.9 billion. Imports from the USA decreased by £0.3 billion, with imports from several other countries, including Qatar and Turkey, showing decreases of £0.1 billion. There were offsetting increases in imports from Hong Kong of £0.2 billion, and from a number of other countries, including Nigeria and South Korea, of £0.1 billion.

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

Quarterly analysis

In quarter 2 April to June 2015, the deficit on trade in goods with EU countries widened by £0.2 billion to £22.0 billion.

Between quarter 1 January to March 2015 and quarter 2 April to June 2015, exports to the EU increased by £0.6 billion (1.8%) to £34.2 billion. Exports to France increased by £0.3 billion and exports to Germany increased by £0.2 billion.

Between quarter 1 January to March 2015 and quarter 2 April to June 2015, imports from the EU increased by £0.9 billion (1.6%) to £56.2 billion. Imports from the Netherlands increased by £0.6 billion and from Belgium and Luxembourg (combined) and Germany, each by £0.4 billion. These increases were partially offset by a decrease in imports from France of £0.5 billion.

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

In quarter 2 April to June 2015, the deficit on trade in goods with non-EU countries narrowed by £3.2 billion to £5.4 billion.

Between quarter 1 January to March 2015 and quarter 2 April to June 2015, exports to non-EU countries increased by £2.4 billion (6.4%) to £40.4 billion. Exports to the USA increased by £1.6 billion, to China by £0.7 billion and to Saudi Arabia by £0.6 billion.

Between quarter 1 January to March 2015 and quarter 2 April to June 2015, imports from non-EU countries decreased by £0.8 billion (1.7%) to £45.8 billion. Imports from China decreased by £1.4 billion, this was partially offset by increases in imports from South Korea of £0.6 billion and Switzerland of £0.4 billion.

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

The USA remains the UK's top export partner with exports of £4.4 billion in June 2015. There were record highs in the level of exports to Uruguay in June 2015, with an increase of £0.1 billion (650.0%). This, together with a small decrease in imports, meant the UK’s trade surplus with Uruguay was also at a record high of £0.1 billion. Anecdotal evidence suggests this increase is due to a rise in the export of crude oil.

Germany remains the UK’s top import partner with imports of £5.3 billion in June 2015. There were no significant monthly import movements in June 2015.

In quarter 2 April to June 2015, there were record highs in exports to the USA and to Saudi Arabia. Exports to the USA increased by £1.6 billion (13.6%) to £13.2 billion. Anecdotal evidence suggests this is due to an increase in the export of chemicals. Exports to Saudi Arabia were also at a record high, increasing by £0.6 billion (66.0%) to £1.4 billion over the same period. Exports to Greece decreased by £0.1 billion (19.4%) to a record low of £0.2 billion in quarter 2 April to June 2015.

In quarter 2 April to June 2015, imports from South Korea, the USA, Poland and Pakistan were all at a record high. Imports from South Korea increased by £0.6 billion (62.7%) to £1.6 billion when compared with quarter 1 January to March 2015. Imports from the USA increased by £0.2 billion (1.8%) to £8.6 billion, with evidence attributing this movement to an increase in the imports of miscellaneous manufactures. Imports from Poland increased by £0.1 billion (5.0%) to £2.1 billion and imports from Pakistan increased by £1.0 million (3.0%) to £0.3 billion.

Between May 2015 and June 2015, the total volume of exports increased by 1.5% and the total volume of imports increased by 2.9%.

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

In quarter 2 April to June 2015, the volume of exports increased by 6.6% and the volume of imports increased by 0.4% when compared with quarter 1 January to March 2015.

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

In June 2015, compared with May 2015, export prices increased by 0.1% and import prices decreased by 0.7%. Excluding the oil price effect, export prices increased by 0.4% and import prices decreased by 0.4%.

In quarter 2 April to June 2015, when compared with quarter 1 January to March 2015, export prices increased by 0.3% and import prices decreased by 0.4%. Excluding the oil price effect, export prices decreased by 0.6% and import prices decreased by 1.2%.

In June 2015, the balance on trade in oil was in deficit by £1.0 billion compared with a deficit of £0.5 billion in May 2015. Oil exports decreased by £0.3 billion to £1.9 billion and oil imports increased by £0.2 billion to £2.9 billion.

In quarter 2 April to June 2015, the balance on trade in oil was in deficit by £2.7 billion, widening by £0.2 billion when compared with quarter 1 January to March 2015. Oil exports increased by £0.8 billion to £5.8 billion and oil imports increased by £0.9 billion to £8.5 billion.

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

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

In quarter 2 April to June 2015, the estimated surplus on trade in services was £22.6 billion.

In quarter 2 April to June 2015, exports were estimated to have been £55.1 billion and imports £32.4 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.

In quarter 2 April to June 2015, the surplus on trade in services was £22.6 billion. Financial services remains the largest contributor to this surplus at £10.3 billion.

In quarter 2 April to June 2015, exports of services dropped by £0.1 billion to £55.1 billion. This decrease reflects changes across several service products. For the same period, imports of services rose by £0.2 billion to £32.4 billion. The main contributor to this increase was other business services (£0.3 billion). At service product level, the data are shown in Table 12.

In this release, a country breakdown for Trade in Services is not available. However a country breakdown up to quarter 1 January to March 2015 can be found in the United Kingdom Economic Accounts and the Quarterly Balance of Payments publications.

Revisions to trade in services

Revisions to April 2015 and May 2015 mainly reflect updated estimates from the ONS International Passenger Survey. Exports were revised down in April 2015 by less then £0.1 billion and in May 2015 by £0.1 billion. Imports saw minimal change for both periods.

The UK trade record information for June 2015 can be accessed on our website.