UK trade: June 2020

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

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Dyddiad y datganiad:
12 August 2020

Cyhoeddiad nesaf:
11 September 2020

1. Main points

  • The total trade surplus, excluding non-monetary gold and other precious metals, widened by £8.6 billion to £8.6 billion in Quarter 2 (Apr to June) 2020, as imports fell by £35.2 billion and exports fell by a lesser £26.7 billion; the largest underlying total trade surplus on a three-month basis since records began in 1998.

  • Falling imports and exports in Quarter 2 2020 were largely seen in trade in goods, excluding non-monetary gold and other precious metals, where imports and exports fell by £21.4 billion and £14.0 billion respectively, while for trade in services they fell by £13.9 billion and £12.7 billion respectively.

  • The largest falls in both imports and exports of goods in Quarter 2 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 because of coronavirus-related restrictions.

  • Removing the effect of inflation, the total trade surplus, excluding unspecified goods (which includes non-monetary gold), increased by £7.2 billion to £7.8 billion in Quarter 2 2020, as imports fell by £31.1 billion and exports fell by a lesser £23.8 billion. 

  • The total trade balance, excluding non-monetary gold and other precious metals, increased by £37.6 billion to a surplus of £3.7 billion in the 12 months to June 2020.

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3. The total trade balance, excluding precious metals, increased in Quarter 2 2020

The total trade surplus, excluding non-monetary gold and other precious metals, widened by £8.6 billion to £8.6 billion in Quarter 2 (Apr to June) 2020 (Figure 1). The increase of the underlying total trade balance was because of imports falling by £35.2 billion, while exports fell by a lesser £26.7 billion.

The trade in goods deficit, excluding precious metals, narrowed by £7.4 billion to £20.7 billion in Quarter 2 2020 (Figure 2). Goods imports fell by £21.4 billion to £87.0 billion, while goods exports fell by £14.0 billion to £66.4 billion. Falling imports and exports were largely seen in machinery and transport equipment, and fuels, with larger falls of each in imports than exports (Figure 3).

This release covers UK trade data for Quarter 2 2020, following the introduction of lockdown measures in March to combat the coronavirus (COVID-19). Most of the UK's top trading partners have been significantly affected by the coronavirus, and the data in this release suggest evidence of coronavirus-related impacts on UK trade.

The falls in exports and imports of machinery and transport equipment in Quarter 2 2020 were largely seen in road vehicles, where exports and imports fell by £7.8 billion and £4.2 billion respectively. This can be explained by both the drop in demand for cars and light commercial vehicles, and the closure of car showrooms in the UK, which were closed between 23 March and 1 June; as well as a drop in the production of transport equipment by the UK's largest EU partners.

Our monthly trade data show some early signs of recovery, as imports of cars in June 2020 increased 207.2% from May, albeit still 30.5% below the levels of May 2019, suggesting an increase in demand. This is supported by Society of Motor Manufacturers and Traders (SMMT) data, which report an increase of 618% in new car registrations between May and June 2020.

The fall in imports and exports of fuels are likely linked to the global falling demand for oil. Restrictions on travel and the closure of workplaces and borders sharply reduced demand for personal vehicle use and air travel, driving down domestic demand for oil with a 31.4% decrease in deliveries of petroleum products for inland consumption (XLS, 564KB). Oil and gas extraction did not, however, decrease at the same rate as demand, with extraction decreasing by an average of 2.6% in the three months to May.

The limited decrease in oil extraction indicates that the supply of oil was not interrupted as much as other industries. The divergence between the import and export of oil is likely linked to the drop in demand for domestic oil, the relative stability of UK oil and gas extraction and demand from export partners picking up more quickly than domestic demand, as they reduced lockdown restrictions earlier.  Similar trends are seen in the Coronavirus and the impact on output in the UK economy release, which found monthly sector level growth of 8.4% in June.

The trade in services surplus widened by £1.2 billion to £29.3 billion in Quarter 2 2020. Services imports fell by £13.9 billion to £35.3 billion, while services exports fell by £12.7 billion to £64.6 billion.

Exports of precious metals rose by £8.2 billion in Quarter 2 2020, while imports fell by £3.2 billion. Including precious metals, the total trade balance increased by £20.0 billion to £18.8 billion in Quarter 2 2020, driven by a narrowing of the trade in goods deficit.

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4. The trade in goods deficit, excluding precious metals, narrowed with EU and non-EU countries in Quarter 2 2020

The trade in goods deficit, excluding non-monetary gold and other precious metals, narrowed by £5.4 billion to £14.2 billion with EU countries in Quarter 2 (Apr to June) 2020. With non-EU countries, it narrowed by a lesser £2.0 billion to £6.5 billion (Figure 4).

The narrowing of the trade in goods deficit, excluding precious metals, with EU countries was because of a £11.2 billion fall in goods imports, while goods exports fell by a lesser £5.8 billion. Falling goods imports from EU countries were largely seen in machinery and transport equipment, and miscellaneous manufactures. Falling exports to EU counties were largely because of machinery and transport equipment, and fuels.

The narrowing of the trade in goods deficit, excluding precious metals, with non-EU countries, was because of a £10.2 billion fall in goods imports, while goods exports fell by a lesser £8.2 billion. Falling goods imports were largely seen in fuels, and machinery and transport equipment. Falling exports from non-EU countries were largely seen in machinery and transport equipment, and miscellaneous manufactures.

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5. Removing the effect of inflation, the total trade surplus, excluding unspecified goods, widened in Quarter 2 2020

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 £7.2 billion to £7.8 billion in Quarter 2 (Apr to June) 2020, as imports fell by £31.1 billion and exports fell by £23.8 billion (Table 2, Figure 5).

Total trade import prices fell 0.8% in Quarter 2 2020, while export prices fell 0.4%. Fuels were the largest drivers of the fall in both import and export prices, by 35.7% and 36.7% respectively.

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6. Explore UK trade in goods country-by-commodity data for 2019 with our interactive tools

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.

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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).

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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. The total trade balance, excluding precious metals, increased to a surplus in the 12 months to June 2020

The total trade balance (goods and services), excluding non-monetary gold and other precious metals, increased by £37.6 billion to a surplus of £3.7 billion in the 12 months to June 2020, as imports fell by £67.6 billion and exports fell by a lesser £29.9 billion (Table 3).

The increase of the underlying total trade balance in the 12 months to June 2020 was largely because of a £39.5 billion narrowing of the trade in goods deficit to £104.6 billion. Imports decreased by £61.7 billion, while exports decreased by £22.1 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 June 2020 was largely because of a £22.4 billion narrowing of the deficit with non-EU countries to £25.1 billion, while the deficit with EU countries narrowed £17.1 billion to £79.5 billion.

The trade in services surplus narrowed by £1.9 billion to £108.3 billion in the 12 months to June 2020, as exports fell by £7.8 billion and imports fell by a lesser £5.9 billion.

Exports of precious metals increased by £23.0 billion in the 12 months to June 2020, while imports fell by £9.8 billion. Including precious metals, the total trade deficit narrowed by £70.4 billion to £23.5 billion in the 12 months to June 2020, largely because of a £72.3 billion narrowing of the trade in goods deficit.

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8. Revisions

In accordance with the National Accounts Revisions Policy, data in this release have been revised back to April 2020, when compared with our previous trade bulletin from 14 July 2020. Data in this release are consistent with the GDP first quarterly estimate for Quarter 2 (Apr to June) 2020 also published on 12 August 2020.

The total trade surplus for April 2020 was revised up (widening of the surplus) by £3.5 billion to £5.8 billion, because of a £2.3 billion upward revision to the trade in services balance and a £1.2 billion upward revision to the trade in goods balance.

The total trade surplus for May 2020 was revised up (widening of the surplus) by £3.4 billion to £7.7 billion, because of a £2.3 billion upward revision to the trade in services balance and a £1.0 billion upward revision to the trade in goods balance.

In addition to the inclusion of later trade survey data, the revisions also include the impact of gross domestic product (GDP) balancing adjustments that are applied to component series (which includes trade) to improve the GDP quarterly alignment position.

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9. UK trade data

UK trade: goods and services publication tables
Dataset | Released 12 August 2020
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 12 August 2020
Monthly value of UK exports and imports of goods and services by current price, chained volume measures (CVMs) and implied deflators (IDEFs).

Other related trade data
Released 12 August 2020
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

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.

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11. Measuring the data

Coronavirus data impacts

In light of the challenges with data collection from social distancing measures put in place because of the 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, making it a particularly important aspect of our trade numbers. 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 used information from other ITIS 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. We are also exploring the option of moving the ITIS survey fully online, along with a number of other surveys across the Office for National Statistics (ONS).

International Passenger Survey (IPS)

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 in the future.

For Quarter 1 (Jan to Mar) 2020, monthly IPS data for January and February, as well as partial responses for March have been used. While we recognise that March data will have a lower response than typical, we have quality assured the data against other travel data sources to ensure the estimate reflects the changing picture for travel services.

For Quarter 2 (Apr to June) 2020, we have worked with ONS’s Data Science Campus to create new estimates using alternative data sources. The data sources that have been used include Civil Aviation Authority, Eurotunnel, 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.

Trade in Services April and May data

In light of the UK and global lockdowns because of the coronavirus, we have taken additional steps to quality assure estimates. We have used a variety of sources to support this work including: the ONS’s Index of Services (IoS), ONS’s Business Impact of COVID-19 Survey (BICS), IPS modelling, Bank of England, Chamber of Shipping and flight radar.

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) (PDF, 3.0MB), 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 HM Revenue and Customs (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.

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12. National Statistics designation status

National Statistics designation status

The UK Statistics Authority suspended the National Statistics designation of UK trade (PDF) 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.

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Manylion cyswllt ar gyfer y Bwletin ystadegol

Abi Casey
trade@ons.gov.uk
Ffôn: +44 (0)1633 455121