UK Trade Deficit Widens Sharply As Imports Jump


The UK’s deficit on trade in goods and services widened by £2.6 billion to £4.2 billion in November 2016 from a downwardly revised £1.5 billion in the previous month. Exports rose by £0.7 billion to an all-time high of £47.3 billion while imports increased at a much faster £3.3 billion also to a record £51.5 billion , mainly boosted by higher purchases of machinery and transport equipment.

Total exports (goods and services) increased by £0.7 billion, or 1.5 percent, to £47.3 billion, boosted by a £0.7 billion, or 2.8 percent, increase in the export of goods. Total imports (goods and services) rose by £3.3 billion, or 6.9 percent, to £51.5 billion over the same period, reflecting a £3.0 billion, or 8.4 percent, gain in the import of goods. The deficit on trade in goods was £12.2 billion in November 2016, widening by £2.3 billion from October 2016. 

Exports of goods increased by £0.7 billion, or 2.8 percent, to £27.0 billion in November 2016, from £26.3 billion in October 2016. Rises in exports of finished manufactures, fuels and unspecified goods all contributed to the growth of exports. Within finished manufactures, exports of machinery and transport equipment rose by £0.4 billion, mainly attributed to increased exports of electrical machinery to EU countries; businesses reported an increase in exports of plugs and sockets to the Netherlands, Germany and France. Exports of fuels rose by £0.3 billion, attributed to an increase in the export of oil to EU countries, particularly to the Netherlands and France. 

Exports of unspecified goods (including non-monetary gold) to non-EU countries rose by £0.3 billion. In contrast to increases in other commodity groups, the exports of semi-manufactures fell by £0.3 billion. This was mainly due to a decrease in exports of material manufactures (such as non-ferrous metals, minerals and precious stones) to non-EU countries.

Imports of goods increased by £3.0 billion, or 8.4 percent, to £39.2 billion in November 2016, from £36.2 billion in October 2016. The largest contributions to the increase were from finished manufactures and semi-manufactures. Within finished manufactures, imports of transport equipment rose by £1.4 billion, following 2 consecutive months of falling import values. This is mainly due to increases in the imports of other transport equipment (ships, aircraft and railway equipment) and electrical machinery (from non-EU countries). The increase in electrical machinery is attributed to an increase in imports of portable data processing machines (for example laptops, tablets) from China.

Imports of semi-manufactures rose by £0.8 billion, which can be mainly attributed to an increase in the import of chemicals from EU countries (up £0.5 billion). Imports of miscellaneous manufactures (such as clothing and footwear, and scientific and photographic equipment) also contributed to the growth of imports in this commodity group.

Between the 3 months to August 2016 and the 3 months to November 2016, the total trade deficit (goods and services) narrowed by £0.4 billion to £11.0 billion. The narrowing of the deficit reflected a greater rise in exports (+2.9 percent) than the rise in imports (+2.4 percent).

ONS | Joana Ferreira | joana.ferreira@tradingeconomics.com
1/11/2017 3:22:58 PM