UK trade: February 2021

Total value of UK exports and imports of goods and services in current prices, chained volume measures and implied deflators.

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Email Dean Scott

Dyddiad y datganiad:
13 April 2021

Cyhoeddiad nesaf:
12 May 2021

1. Main points

  • Exports of goods to the EU, excluding non-monetary gold and other precious metals, partially rebounded in February 2021, increasing by £3.7 billion (46.6%) after a record fall of £5.7 billion (negative 42.0%) in January.

  • The increases in exports to the EU in February 2021 were driven by machinery and transport equipment and chemicals, particularly cars and medicinal and pharmaceutical products.

  • Imports of goods from the EU, excluding non-monetary gold and other precious metals, showed a weaker increase of £1.2 billion (7.3%) in February 2021 after a record fall of £6.7 billion (negative 29.7%) in January.

  • The more modest increase in imports from the EU were driven by machinery and transport equipment, and chemicals, particularly cars and medicinal and pharmaceutical products.

  • Total imports of goods from non-EU countries, excluding non-monetary gold and other precious metals, increased by £1.7 billion (10.2%) in February 2021 while exports fell by £1.5 billion (negative 10.5%).

  • The total trade deficit for February 2021, excluding non-monetary gold and other precious metals, widened by £0.5 billion to £1.4 billion; imports increased by £2.9 billion (6.5%) and exports increased by £2.3 billion (5.4%).

  • The total trade deficit, excluding non-monetary gold and other precious metals, narrowed by £2.1 billion to £6.3 billion in the three months to February 2021; imports decreased by £5.7 billion (negative 3.8%), while exports decreased by £3.6 billion (negative 2.5%).

  • Trade in services imports and exports have consistently remained at a lower level since Q2 2020 as services accounts such as travel and transport trade continue to be affected by coronavirus (COVID-19) restrictions.

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Note: Recent trade estimates are subject to more uncertainty than usual because of the practical challenges and temporary factors outlined in section 3. We encourage users to apply caution when making short-term comparisons of trade movements.

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3. Understanding trade

In this month's bulletin we focus heavily on monthly trends due to their volatility since the end of the transition period with the European Union. However, it should be noted that monthly data are erratic and small movements in these series should be treated with caution. More information on the impact of EU-Exit on the collection and compilation of UK trade statistics was published recently by the ONS.

January 2021 saw significant falls in imports and exports of goods from the EU, particularly in machinery and transport equipment, and chemicals. January 2021 data were the first to show trade after the transition period ended on 31 December 2020. In addition to the changes facing the UK after the transition period ended, England joined the rest of the UK in another national lockdown at the beginning of January 2021, which continued through February. The falls are also consistent with the unwinding of stocks, after businesses stockpiled in November and December 2020 in preparation for the end of the transition period.

The 7-day average of daily shipping visits increased from 290 visits on 31 January 2021 to 344 on 28 February 2021. We expect shipping indicators to be related to the import and export of goods, and therefore these early indicators suggest partial recovery consistent with the increases seen in February trade figures. Despite the evidence of partial recovery from the substantial January falls in some commodities, it is still too soon to determine to what extent the monthly changes in trade for January and February can be directly attributed to the end of the transition period. Evidence from the Business Insights and Conditions Survey (BICS) suggested that additional paperwork and higher transportation costs were the biggest challenges facing UK importers and exporters in February, which most businesses attribute to leaving the transition period. However, trade patterns are likely to also reflect the impacts of the unwinding of stocks, coronavirus (COVID-19) pandemic restrictions, and lower demand due to the UK and global economic recession. It is too soon to be able to assess to what extent recent trading patterns are short-term or reflect more lasting structural changes.

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4. Monthly trade analysis

Although imports of goods from the EU did increase in February 2021, they were not as large as goods exports to the EU. Where the UK would commonly import more from EU countries in commodities like chemicals, in February 2021 increasing imports of chemicals were driven by imports from non-EU countries. Total imports of chemicals increased by £0.8 billion (19.5%) in February 2021, with only £0.1 billion (4.0%) of that increase coming from EU countries (Figure 2). Goods from the EU were stockpiled in November and December 2020, particularly chemicals, in preparation for the end of the transition period, and UK businesses may still be running down these stocks before importing more. Additionally, exports to the EU from the UK have been subject to new border controls since 1 January, but similar import checks were originally not scheduled to be introduced until 1 April. It is possible that traders in the EU may have paused exporting to the UK to wait for the new systems to settle in before continuing with trading.

Imports of machinery and transport equipment (including cars) from the EU increased by £0.3 billion (4.8%) in February 2021, a small increase relative to the fall seen in January (Figure 3). The car and electrical industries worldwide are suffering from a shortage of microchips, first caused by a temporary delay in supplies and now by a surge in demand driven by changing habits. Ford has said profits could be hit by up to $2.5 billion this year due to chip shortages, while Samsung has said that the company will have to postpone the launch of its new smartphone. Car industry production was significantly impacted by the coronavirus (COVID-19) pandemic in March to July 2020, and recent estimates are likely to reflect the impact of reintroduced restrictions.

Figure 2: Increasing exports were largely seen in machinery and transport equipment, and chemicals to the EU in February 2021

Changes in imports and exports, by goods commodity group, excluding unspecified goods, February 2021 compared with January 2021, EU and non-EU

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Increased exports of goods in February 2021 were largely seen in machinery and transport equipment, and chemicals to the EU. Total exports of machinery and transport equipment increased by £1.0 billion (12.3%) in February 2021, driven by a £1.3 billion (41.8%) rise in exports to the EU. The increase in exports of machinery and transport equipment to the EU was driven by a £0.2 billion (26.3%) rise in exports of cars. The monthly export of cars to the EU in February 2021 was at similar levels to what was seen in February 2020.

Despite an increase in car exports, the latest figures from the Society of Motor Manufacturers and Traders (SMMT) suggest car manufacturing for exports decreased 8.1% between January and February 2021. This is due to the ongoing impact of the coronavirus (COVID-19) pandemic as showrooms remain closed in the UK and across Europe. Despite the ongoing pandemic challenges, the EU remains the UK's largest car buyer as demand for UK vehicles remains high. Despite the 14.0% fall in overall UK car production, production for electric vehicles, plug-in hybrid and hybrid vehicles increased by 25.3%, suggesting that government initiatives such as the introduction of Clean Air Zones and improved charger infrastructure are driving demand for electric vehicles.

Total exports of chemicals increased by £0.5 billion (13.4%) in February 2021, with a £0.9 billion increase in exports of chemicals to EU countries, specifically Belgium. This increase in exports of chemicals to Belgium was largely seen in medicinal and pharmaceutical products. Countries in Europe began to see significant rises in cases of the (COVID-19) coronavirus throughout February, increasing demand for medical products.

Exports of food and live animals to the EU increased by £0.3 billion (77.4%) in February 2021, after being significantly impacted in January (Figure 4). Exports of fish and shellfish to the EU also saw an uptick in February 2021 as exporters adjust to new regulations following the end of the transition period. The disruptions to food exports in January 2021 appear to have largely been overcome and may have only had short-term impacts on trade.

Total exports to non-EU countries fell by £1.5 billion (negative 10.5%) in February 2021, driven by a £0.6 billion (negative 24.2%) fall in exports of miscellaneous manufactures. The lower value of miscellaneous manufactures exports in February is partly explained by the export of a single high value “erratic good” in January.

The total trade deficit for February 2021, excluding non-monetary gold and other precious metals, widened by £0.5 billion to £1.4 billion. This was due to imports increasing by £2.9 billion and exports increasing by a lesser £2.3 billion.

Removing the effect of inflation, trade in goods commodities volumes largely followed the same trend as current prices. An exception to this was trade in fuels, which saw decreases in February following an erratic 2020 picture. In February 2021, imports and exports of fuels fell by £0.7 billion (19.5%) and £0.5 billion (6.9%) respectively on the month.

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5. Total trade, three-monthly and six-monthly movements

The total trade deficit, excluding non-monetary gold and other precious metals, narrowed by £2.1 billion to £6.3 billion in the three months to February 2021 (Figure 5). The narrowing of the total trade deficit was because imports fell by £5.7 billion (negative 3.8%), while exports were £3.6 billion (negative 2.5%) lower.

The underlying trade in goods deficit narrowed by £2.1 billion in the three months to February 2021 (Table 2). Goods imports decreased by £6.0 billion (negative 5.3%), while goods exports decreased by £4.0 billion (negative 5.1%) in the three months to February 2021. Falling imports of goods were largely seen in miscellaneous manufactures, machinery and transport equipment, and material manufactures in the three months to February 2021. Imports of these commodities fell by £3.8 billion (negative 18.3%), £2.2 billion (negative 5.4%), and £1.3 billion (negative 8.6%) respectively in the three months to February 2021.

Falling imports of miscellaneous manufactures were driven by a £2.1 billion (negative 31.9%) fall in imports of clothing in the three months to February 2021, specifically from non-EU countries. National lockdown and the closing of non-essential retail in the UK within this period is likely to have impacted demand for clothing. Imports of cars fell by £1.6 billion (20.2%) in the three months to February, which was also likely due to the national lockdown and closing of showrooms.

The total trade deficit, excluding non-monetary gold and other precious metals, widened by £19.2 billion to £70.9 billion in the six months to February 2021 (Table 2). The widening of the total trade deficit was because imports increased by £31.6 billion (16.6%), while exports increased by a smaller £12.4 billion (8.9%). Trade within the last six months remains stronger than during in the early months of the coronavirus (COVID-19) pandemic, which saw significant short-term disruption to supply chains.

The trade in services surplus increased by £0.1 billion in the three months to February 2021, as imports increased £0.3 billion (0.7%) and exports increased by £0.3 billion (0.5%).

Imports of precious metals more than doubled to £6.2 billion (212.3%) in the three months to February 2021, while exports remained flat. Including precious metals, the total trade deficit widened by £4.1 billion to £15.4 billion in the three months to February 2021.

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6. Explore UK trade in goods country-by-commodity data for 2020 with our interactive tools

Explore the 2020 trade in goods data using our interactive tools. Our data breaks down UK trade in goods with 234 countries by 125 commodities.

Use our map to get a better understanding of what goods the UK traded with a country. Select a country by hovering over it or using the drop-down menu.

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Notes:
  1. For more information about our methods and how we compile these statistics, please see Trade in goods, country-by-commodity experimental data: 2011 to 2016. Users should note that the data published alongside this release are official statistics and no longer experimental.

  2. These data are our best estimate of these bilateral UK trade flows. Users should note that alternative estimates are available, in some cases, through the statistical agencies for bilateral countries or through central databases such as UN Comtrade.

  3. Interactive maps denote country boundaries in accordance with statistical classifications set out within Appendix 4 of the Balance of Payments (BoP) Vademecum (PDF, 1.1MB).

You can also explore the 2020 trade in goods data by commodity, for example, car exports to the EU and UK tea or coffee imports.

Select a commodity from the drop-down menu or click through the levels to explore the data.

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Notes:
  1. For more information about our methods and how we compile these statistics, please see Trade in goods, country-by-commodity experimental data: 2011 to 2016. Users should note that the data published alongside this release are no longer experimental.

  2. These data are our best estimate of these bilateral UK trade flows. Users should note that alternative estimates are available, in some cases, via the statistical agencies for bilateral countries or through central databases such as UN Comtrade.

  3. Interactive maps denote country boundaries in accordance with statistical classifications set out within Appendix 4 of the Balance of Payments (BoP) Vademecum (PDF, 1.1MB).

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7. Total trade and 12-monthly movements

The total trade deficit, excluding non-monetary gold and other precious metals, narrowed by £3.1 billion in the 12 months to February 2021 (Table 3). The narrowing of the total trade deficit was because imports fell £126.1 billion (negative 18.3%) and exports fell by a lesser £123.0 billion (negative 18.3%).

Removing the effect of inflation, the total trade deficit in volume terms, excluding unspecified goods, narrowed by £3.7 billion in the 12 months to February 2021. Imports fell by £118.9 billion (negative 17.5%) to £559.3 billion and exports fell by £115.2 billion (negative 17.5%) to £543.9 billion.

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8. Revisions

The revision policy for this release has changed to align with the rest of the ONS's National Accounts. In accordance with the National Accounts Revisions Policy, the data in this release have been revised from January 2020 to January 2021.

Services data saw large revisions for 2020. The key driver behind revisions to services exports was in education-related services, following the inclusion of the annual benchmark for higher education tuition fees collected from the Higher Education Statistics Agency (HESA). Quarterly estimates have also been revised following the inclusion of updated tourist card spend data. Revisions were also seen in both exports and imports because of the inclusion of late survey returns, especially in other business services.

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9. UK trade data

UK trade: goods and services publication tables
Dataset | Released 13 April 2021
Monthly data on the UK's trade in goods and services, including trade inside and outside the EU.

UK trade time series
Dataset MRET | Released 13 April 2021
Monthly value of UK exports and imports of goods and services by current price, chained volume measures (CVMs) and implied deflators (IDEFs).

UK trade in goods by classification of product by activity time series
Dataset | Released 18 March 2021
Quarterly and annual time series of the value of UK imports and exports of goods grouped by product. Goods are attributed to the activity of which they are the principal products.

Other related trade data
Released 13 April 2021
Other UK trade data related to this publication. These include trade in goods for all countries with the UK, monthly export and import country-by-commodity trade in goods data, and revisions triangles for monthly trade data.

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10. Glossary

Chained volume measures (CVMs)

CVM estimates are a "real" measure in that it has had the effect of inflation removed to measure the change in volume between consecutive periods, fixing the prices of goods and services in one period (the base year).

Current price measures (CPs)

These estimates measure the actual price paid for goods or services, and are not adjusted for inflation. Unless otherwise stated, all current price data are provided in £ million and are seasonally adjusted.

Inflation

Inflation is the change in the average price level of goods and services over a period of time.

Implied deflators (IDEFs)

An IDEF shows the implied change in average prices for the respective components of the trade balance, for example, the IDEF for imports will show the average price movement for imports.

Precious metals and non-monetary gold

Precious metals include non-monetary gold, silver, platinum and palladium, and it forms part of the commodity group "unspecified goods". Non-monetary gold comprises the majority of this group and is the technical term for gold bullion not owned by central banks.

Trade balance

The trade balance is the difference between exports and imports or exports minus imports. When the value of exports is greater than the value of imports, the trade balance is in surplus. When the value of imports is greater than the value of exports, the trade balance is in deficit. The balance is sometimes referred to as "net exports".

A full Glossary of economic terms is available.

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11. Measuring the data

The ONS is publishing more data and analysis than ever before. We are constantly reviewing our publications based on your feedback to make sure that we continue to meet the needs of our users. As a result, future editions of this publication will focus more strongly on headline indicators and main messages. Thank you for your continued support and we value your feedback.

Coronavirus (COVID-19) data impacts

Considering the challenges with data collection from social distancing measures put in place because of coronavirus (COVID-19), we have experienced challenges around the level of survey and data returns for this trade release.

International Trade in Services (ITIS) Survey

Data from the ITIS survey make up over 50% of trade in services data. This release incorporates data collected from the quarterly ITIS survey, which is sent to around 2,200 businesses. As a result of the coronavirus, many businesses have moved to a working from home arrangement or suspended trade, causing a lower response to the survey than usual.

In order to maintain the quality of the survey, we have developed improved imputation methods where we do not have actual data. We have utilised information from other surveys alongside expert guidance to implement these methods and quality assure the data. We continue to review and refine these methods, along with the associated survey methods, to ensure the data are as robust as possible. Alongside this, ITIS data collection has now been moved to online methods, enabling businesses to respond to the survey using spreadsheets, rather than paper, which can then be emailed back to us.

International Passenger Survey

Data from the International Passenger Survey (IPS) are the main source for travel services, making up around 8% of total trade. The IPS was suspended from 16 March 2020 because of the coronavirus (COVID-19) pandemic. We have been investigating alternative ways to continue to measure these services in the future.

We have worked with the ONS Data Science Campus to create new estimates using alternative data sources. The data sources that have been used include the Civil Aviation Authority, Eurotunnel, the Consumer Prices Index including owner occupiers' housing costs (CPIH), airline stock figures and aggregated and anonymised foreign-issued card spend processed through Barclays Point-of-Sale (POS) and "card-not present" channels.

We will continue to develop these estimates over the coming months and any improvements may result in larger than usual revisions for travel services.

UK trade data

Unless otherwise specified, data within this bulletin are in current prices. This means they have not been adjusted to remove the effects of inflation.

End of EU Exit Transition Period

As the transition period has ended and the UK has now entered into a new Trade and Cooperation Agreement with the EU, the UK statistical system will continue to produce and publish our wide range of economic and social statistics and analysis. We are committed to continued alignment with the highest international statistical standards, enabling comparability both over time and internationally, and ensuring the general public, statistical users and decision makers have the data they need to be informed.

Additionally, the Withdrawal Agreement outlines a need for UK gross national income (a fundamental component of the national accounts, which includes GDP) statistics to remain in line with those of other EU countries until EU budget contributions are finalised for the years in which we were a member, and making budget contributions during the transition period. To ensure this comparability during this period, the national accounts will continue to be produced according to European System of Accounts (ESA) 2010 definitions and standards until at least 2024.

As the shape of the UK's future statistical relationship with the EU becomes clearer over the coming period, the ONS is making preparations to assume responsibilities that as part of our membership of the EU, and during the transition period, were delegated to the statistical office of the EU, Eurostat. This includes responsibilities relating to international comparability of economic statistics, deciding what international statistical guidance to apply in the UK context and to provide further scrutiny of our statistics and sector classification decisions.

In applying international statistical standards and best practice to UK economic statistics, we will draw on the technical advice of experts in the UK and internationally, and our work will be underpinned by the UK's well-established and robust framework for independent official statistics, set out in the Statistics and Registration Service Act 2007. Further information on our proposals will be made available later this year.

HMRC data

Data from HMRC are the main data source for trade in goods making up over 90% of trade in goods value. The ONS has worked closely with HMRC to prepare for the change in collection of customs data which occurred at the end of the transition period. In order to maintain the quality of the data we have worked with HMRC to ensure our processes are robust and we only reflect changes in the economic trends. Further information can be found in our article on the "impact of EU-Exit on the collection and compilation of UK trade statistics".

Precious metals

In line with international standards, the ONS's headline trade statistics contain the UK's exports and imports of non-monetary gold.

Because a significant amount of the world's trade in non-monetary gold takes place on the London markets, this trade can have a large impact on the size of and change in the UK's headline trade figures. We present time series data for precious metals as well as total trade excluding this commodity, which may provide a better guide to the emerging trade picture. This includes precious metals and trade excluding precious metals by EU and non-EU countries.

Data on non-monetary gold and other precious metals are obtained from the Bank of England (BoE), who provide a balanced figure (exports less imports). We attribute the balanced data to either exports or imports, depending on whether the data are positive (that is, exports are greater than imports) or negative (that is, exports are less than imports) respectively. Once received from the BoE, the ONS smooths the precious metals data to ensure individual responses cannot be disclosed.

More information about the ONS's recording of non-monetary gold is available.

Methodology

Trade is measured through both exports and imports of goods and services. Data are supplied by over 30 sources including several administrative sources, with HMRC being the largest for trade in goods.

Detailed methodological notes are published in the UK Balance of Payments Pink Book: 2020

The UK trade methodology web pages have been developed to provide detailed information about the methods used to produce UK trade statistics.

More quality and methodology information on strengths, limitations, appropriate uses, and how the data were created is available in the UK trade QMI.

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12. Strengths and limitations

National Statistics designation status

The UK Statistics Authority suspended the National Statistics designation of UK trade on 14 January 2014. We have now responded to all of the specific requirements of the reassessment of UK trade and, as part of our engagement with the Office for Statistics Regulation team, we are sharing our continuous improvement and development plans to support UK trade statistics regaining National Statistics status. We welcome feedback on our new trade statistics, developments and future plans. If you have any comments, please email them to trade@ons.gov.uk.

We are undertaking a programme of improvements to UK trade statistics in line with the UK trade development plan, including more detail and improvements now published to address anticipated future demands.

Trade asymmetries

These data are our best estimates of bilateral UK trade flows, compiled following internationally agreed standards and using a wide range of robust data sources. However, in some cases, alternative estimates of bilateral trade flows are available from the statistical agencies for the relevant countries or through central databases such as UN Comtrade. Differences between estimates are known as trade asymmetries and are a known aspect of international trade statistics, affecting bilateral estimates across the globe, not just in the UK.

We are heavily engaged in analysis of these asymmetries, developing strong bilateral relationships with other countries to understand, explain and potentially reduce them. We have published a series of analyses showing comparisons and the relative strengths of different estimates, which users may wish to reference to help them better understand the quality of our bilateral trade estimates.

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Manylion cyswllt ar gyfer y Bwletin ystadegol

Dean Scott
trade@ons.gov.uk
Ffôn: +44 (0)1633 455467