UK Trade Deficit Narrows in May



The total UK trade deficit narrowed by GBP 0.3 billion to GBP 2.79 billion in May 2018 from a downwardly revised GBP 3.09 billion in the previous month.

Exports of goods and services from the UK increased 2.8 percent to GBP 51.85 billion in May from GBP 50.41 billion in the previous month, due to higher sales of goods (4.1 percent), in particular fuels (8 percent), machinery & transport equipment (6.5 percent), miscellaneous manufactures (3.5 percent) and chemicals (2.3 percent). Also, exports of services advanced 1.4 percent.

Among major trading partners, exports of goods to the EU went up 0.6 percent, as sales increased mainly to Germany (2.8 percent), France (7 percent), Ireland (5.3 percent) and Italy (0.3 percent); while there was a decline in exports to the Netherlands (-9.6 percent), Belgium (-3.1 percent) and Spain (-0.4 percent). Also, sales to non-EU countries jumped 7.7 percent, namely to the US (11.3 percent), China (38.6 percent), Canada (16.9 percent) and Switzerland (30.7 percent). Exports were lower for Hong Kong (-14 percent), South Korea (-13.8 percent) and Japan (-2.4 percent).

Imports rose at a softer 2.1 percent to an all-time high of GBP 54.64 billion in May from GBP 54.64 billion in the previous month. The increase was driven by a 2.7 percent rise in purchases of goods, mainly fuels (8.6 percent), material manufactures (7.4 percent), food & live animals (5.5 percent), chemicals (4.4 percent), miscellaneous manufactures (2.6 percent), and machinery & transport equipment (2 percent). Also, there was a 0.4 percent gain in imports of services.

Among trading partners, imports of goods from the EU grew 4.1 percent, mainly from Germany (1.1 percent), Belgium (16.1 percent), Spain (2.3 percent) and Ireland (1.6 percent). However, there was a decline in imports from the Netherlands (-0.6 percent), France (-1.7 percent) and Italy (-0.9 percent). In addition, purchases from non-EU countries went up 1 percent, as imports increased the most from the US (1.8 percent), China (2.9 percent) and India (15.6 percent); while those from Norway (-7.4 percent), Japan (-6.5 percent) and Turkey (-7.2 percent) dropped sharply.

In the three months to May 2018, the trade deficit widened GBP 5.0 billion to GBP 8.3 billion. This was due to a GBP 5.0 billion widening of the trade in goods deficit, resulting from a combination of falling goods exports (GBP 3.1 billion) and rising goods imports (GBP 1.9 billion). Services imports and exports mostly offset each other as both increased by around GBP 0.5 billion, resulting in a relatively small decline in the trade in services surplus.

UK Trade Deficit Narrows in May


ONS | Joana Ferreira | joana.ferreira@tradingeconomics.com
7/10/2018 11:10:24 AM