UK trade: July 2020

• The total trade surplus, excluding non-monetary gold and other precious metals, widened by £5.9 billion to £6.4 billion in the three months to July 2020, as imports fell by £8.5 billion and exports fell by a lesser £2.7 billion.

• The widening of the total trade surplus, excluding non-monetary gold and other precious metals, in the three months to July 2020 was largely because of a £3.4 billion narrowing of the trade in goods deficit, while the trade in services surplus widened by a lesser £2.4 billion.

• The largest falls in both imports and exports of goods in the three months to July 2020 were seen in machinery and transport equipment and fuels, which can be linked to the sharp drop in demand for road vehicles and oil due to coronavirus-related restrictions.

• The total trade surplus, excluding non-monetary gold and other precious metals, narrowed by £0.6 billion in July 2020, as imports rose by £3.3 billion and exports rose by a lesser £2.7 billion.

• Removing the effect of inflation, the total trade surplus excluding unspecified goods (which includes non-monetary gold) widened by £4.1 billion to £5.2 billion in the three months to July 2020, as imports fell by £7.4 billion and exports fell by a lesser £3.3 billion. 

• The total trade balance, excluding non-monetary gold and other precious metals, increased by £35.8 billion to a surplus of £3.7 billion in the 12 months to July 2020.

The total trade surplus, excluding non-monetary gold and other precious metals, narrowed by £0.6 billion in July 2020, following a £1.5 billion narrowing of the surplus in June, as imports rose faster than exports (Table 1). Relatively small movements were seen in imports and exports in May. Rising imports and exports in June and July were largely seen in miscellaneous manufactures, and machinery and transport equipment. It should be noted, however, that monthly data are erratic and small movements in these series should be treated with caution.

The total trade surplus, excluding non-monetary gold and other precious metals, widened by £5.9 billion to £6.4 billion in the three months to July 2020 (Figure 1). The widening of the underlying total trade surplus was because of imports falling by £8.5 billion, while exports fell by a lesser £2.7 billion.

The underlying trade in goods deficit narrowed by £3.4 billion to £23.2 billion in the three months to July 2020 (Figure 2). Goods imports fell by £6.3 billion to £92.5 billion, while goods exports fell by £2.9 billion to £69.3 billion. Falling imports and exports were largely seen in machinery and transport equipment, and fuels, with imports falling more in each than exports (Figure 3).

This release covers UK trade data for May to July 2020, following the introduction of lockdown measures in March to combat the coronavirus (COVID-19) pandemic. Most of the UK's top trading partners have been significantly affected by COVID-19, and the data in this release suggest evidence of pandemic-related impacts on UK trade.

The falls in exports and imports of machinery and transport equipment were largely seen in road vehicles, which fell £1.3 billion and £1.1 billion respectively in the three months to July 2020. Road vehicle exports to non-EU countries fell £1.0 billion, largely due to falling United States (US) demand. Increases were seen in US exports in June and July as dealerships reopened, but demand remained below pre-COVID-19 levels for total vehicle sales and foreign vehicle sales, with total vehicle sales in July 2020 14.4% below July 2019. This could be due to the US having the highest number of COVID-19 cases globally.

Road vehicle imports fell £1.1 billion in the three months to July, following a £2.6 billion fall in imports in April 2020 as dealerships were closed due to lockdown measures. In June and July 2020, imports increased on a monthly basis as dealerships reopened across the UK. New car registrations increased in June and July but overall registrations were still down by 41% on a year to date basis. Despite the increase in July, the Society of Motor Manufacturers and Traders (SMMT) is predicting a 30% decline in registrations for 2020 as a whole, representing more than £20 billion in lost sales.

Exports and imports of fuels fell £0.8 billion and £3.6 billion respectively in the three months to July 2020, mostly driven by oil. The UK was a net exporter of oil (XLS, 556KB) in the three months to July 2020.

The fall in fuel imports to the UK is largely accounted for by a £2.8 billion fall in oil imports worldwide. This reflects the declining demand for oil and oil products (XLS, 556KB) within the UK as a result of reduced travel and business closures. During the three months to June 2020, sales of petrol fell 48% and diesel fell 38% as deliveries of petroleum products for inland consumption remained 1.7 million tonnes below February pre-COVID-19 levels. However, demand for fuels increased in June, particularly for main transport fuels (XLS, 556KB) as lockdown measures were eased and an increasing number of workers were taken off furlough and encouraged back to their place of work.

The trade in services surplus widened by £2.4 billion to £29.6 billion in the three months to July 2020. Services imports fell by £2.2 billion to £39.7 billion, while services exports rose by a lesser £0.2 billion to £69.3 billion. The falls in exports and imports of services were largely seen in travel services, transport services and financial services.

Figure 2: The underlying total trade surplus in the three months to July 2020 was because of greater falls in imports than exports

Changes in the UK trade balances, excluding non-monetary gold and other precious metals, exports and imports, three months to July 2020 compared with three months to April 2020

Source: Office for National Statistics – UK trade

Notes:

1. The arrow direction indicates whether a component has increased or decreased, while the colour denotes the impact the direction of a movement has on the trade balance. For example, an increase in imports is denoted by an upward red (dark) arrow, as a rise in imports has a negative impact on the trade balance. An increase in the trade in goods deficit will be indicated by an upwards red (dark) arrow as this would have a negative impact on the balance.

Download this image Figure 2: The underlying total trade surplus in the three months to July 2020 was because of greater falls in imports than exports

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Exports of precious metals rose by £2.2 billion in the three months to July 2020, while imports fell by £3.1 billion. Including precious metals, the total trade surplus widened by £11.1 billion to £12.0 billion in the three months to July 2020, driven by a narrowing of the trade in goods deficit.

The trade in goods deficit with non-EU countries, excluding non-monetary gold and other precious metals, narrowed by £2.2 billion to £6.6 billion in the three months to July 2020. With EU countries, it narrowed by a lesser £1.3 billion, to £16.6 billion (Figure 4).

The narrowing of the trade in goods deficit, excluding precious metals, with non-EU countries, was because of a £4.4 billion fall in goods imports, while goods exports fell by a lesser £2.2 billion. Falling goods imports and exports from non-EU countries were largely seen in machinery and transport equipment and fuels.

The narrowing of the trade in goods deficit, excluding precious metals, with EU countries was because of a £2.0 billion fall in goods imports, while goods exports fell by a lesser £0.6 billion. Falling goods imports from EU countries were largely seen in machinery and transport equipment, material manufactures and chemicals. Falling exports to EU counties were largely because of machinery and transport equipment and fuels.

This section presents volume and price estimates of UK trade exports, imports and balances, using chained volume measures (CVMs) and implied deflators (IDEFs). For more details on these terms, see Section 10 of this release.

In volume terms, the total trade surplus (goods and services), excluding unspecified goods (which includes non-monetary gold), widened £4.1 billion to £5.2 billion in the three months to July 2020, as imports fell by £7.4 billion and exports fell by a lesser £3.3 billion (Table 2, Figure 5).

Total trade import prices fell 0.2% in the three months to July 2020, while export prices rose 0.6%. The fall in import prices was largely driven by a 13.0% fall in fuels.

Explore the 2019 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 particular country. Select a country by hovering over it or using the drop-down menu.

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 2019 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.

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).

The total trade balance (goods and services), excluding non-monetary gold and other precious metals, increased by £35.8 billion to a surplus of £3.7 billion in the 12 months to July 2020, as imports fell by £79.7 billion and exports fell by a lesser £43.9 billion (Table 3).

The increase of the underlying total trade balance in the 12 months to July 2020 was largely because of a £37.4 billion narrowing of the trade in goods deficit to £105.0 billion. Imports decreased by £69.0 billion, while exports decreased by £31.6 billion. The fall in both imports and exports of goods was largely seen with machinery and transport equipment and fuels.

The narrowing of the underlying trade in goods deficit in the 12 months to July 2020 was because of a £19.4 billion narrowing of the deficit with non-EU countries to £26.0 billion, while the deficit with EU countries narrowed £17.9 billion to £78.9 billion.

The trade in services surplus narrowed by £1.6 billion to £108.6 billion in the 12 months to July 2020, as exports fell by £12.4 billion and imports fell by a lesser £10.8 billion.

In accordance with the National Accounts Revisions Policy, trade in goods data in this release have been revised back to April 2020, when compared with our previous trade bulletin from 12 August 2020, however, trade in services data within this release have not been revised. Services data are processed as part of Quarterly National Accounts, which for this month's release will include changes as a result of the Blue Book 2020. Services revisions that would have been expected to be taken on at this point will be included in the annual update of the UK National Accounts on 30 September 2020.

The total trade surplus for June 2020 was revised down (narrowing of the surplus) by £1.4 billion to £3.9 billion, driven by a £1.7 billion downwards revision to goods exports.

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”.

Inflation

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

Chained volume measures (CVMs)

A CVM is 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).

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.

A full Glossary of economic terms is available.

Revisions Policy

The revision policy for this release will be changing to align with the rest of the Office for National Statistics (ONS's) National Accounts. The impact of this will be minimal and will only affect the publication in the third month of a quarter where we will see a reduced period of revision. These revisions will continue to be shown within the final quarterly estimate of GDP and Quarterly National Accounts publications at the end of the quarter. The first publication that this will affect will be on 10 December 2020.

Coronavirus data impacts

In light of 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. With the IPS suspended from 16 March 2020 we have been investigating alternative ways to continue to measure these services going forward.

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 (CPs). This means they have not been adjusted to remove the effects of inflation.

UK trade data within our monthly trade bulletin are published at around a six-week lag because of the timeliness of source data. For example, the December 2020 publication will include data up to the end of October 2020.

After EU withdrawal

As the UK leaves the EU, it is important that our statistics continue to be of high quality and are internationally comparable. During the transition period, those UK statistics that align with EU practice and rules will continue to do so in the same way as before 31 January 2020. We will continue to produce statistics broken down to EU and non-EU aggregates.

After the transition period, we will continue to produce our international trade statistics in line with the UK Statistics Authority's Code of Practice for Statistics and in accordance with internationally agreed statistical guidance and standards. This is based on the International Monetary Fund's (IMF's) Balance of Payments and International Investment Position Manual sixth edition (BPM6), until those standards are updated.

Data published in UK trade statistical releases also form part of the broader system of UK National Accounts, which will be produced in line with international standards as laid down in the European System of Accounts (ESA) 2010 until the EU budgets are finalised for the years in which we were a member, as specified in the Withdrawal Agreement.

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.

The base year

Because of a very demanding set of changes in the 2019 national accounts annual update, we have not fully reconciled 2017 annual data. Instead, we have produced an indicative balance to allow further time for final quality assurance of the data. Consequently, the reference year and last base year for all chained volume measure (CVM) series remains as 2016.

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, The Pink Book: 2019.

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.

National Statistics designation status

The UK Statistics Authority suspended the National Statistics designation of UK trade on 14 November 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. On 24 October 2018, we published an article outlining our achievements so far and forward look with regards to the transformation of our trade statistics.

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.