U.K. Trade Deficit Widens in February

According to the Office for National Statistics, UK’s deficit on trade in goods and services was estimated to have been £3.6 billion in February, compared with a deficit of £2.5 billion in January. There was a deficit of £9.4 billion on goods, partly offset by an estimated surplus of £5.8 billion on services.

The value of UK exports fell by 1.1 percent between January 2013 and February 2013, with the value of imports increasing by 1.7 percent over the same period. The largest fall in exports was in goods to non-EU countries (4.7 percent), which included a £329 million fall in exports to the USA. This fall in overall exports continued the downward pattern that started in October 2011, although there has been a degree of month-to-month volatility largely due to changes in the export of goods rather than services. 

Imports have been much flatter by comparison over this period, with services imports being broadly flat throughout 2012 and in to 2013. This perhaps reflects more stable demand for imports in the UK compared with demand in the UK’s major export markets.
The deficit on trade in goods widened in February to £9.4 billion. This was due partly to a low figure for the balance of trade in total manufactures, with exports down by around £0.3 billion on the previous month and imports up by £0.5 billion. This reflects a fall in the export of non-ferrous metals and pharmaceuticals and a rise in the import of pharmaceuticals and road vehicles. In the three months to February, export prices rose 1.8 percent and import prices rose 1.6 percent.
By EU country, exports to Belgium and Germany by value held up better than exports to other member states in February. In the same period, imports from the Netherlands rose due to an increase in trade in gas. This rise was primarily offset by a fall in imports of oil from Denmark.
Outside the EU, exports to the United States fell but exports to South Korea and China both rose.

ONS | Nuno Fontes | nuno@tradingeconomics.com
4/9/2013 9:50:39 AM