The recovery in UK goods exports to the rest of the world in April after a disappointing first quarter of 2023 is welcome, but needs to be sustained.
However, trade with the EU remains weak, even before the additional cost pressures on imports due to the introduction of new customs arrangements in the Target Border Operating Model later this year.
The Government’s Export Strategy needs to maximise growth in services exports across a range of business activity this year, but so far in 2023, they have been broadly flat.
Detailed Analysis
Trade data for April 2023 showed a welcome rise in exports but goods exports to the EU remained weak declining by 0.5%. Services trade was broadly static.
Goods imports values fell by 0.4% in April after removing inflationary effects. Goods exports values rose by 3.4%, this was due to an increase to the rest of the world as they fell to the EU.
EU picture
The 0.5% decrease in April was due to falls in miscellaneous manufactured goods offset by rise in fuel exports to Germany and the Netherlands. Goods imports also declined by 3.6% (largely down to lower chemicals imports – medicines and pharmaceutical products from Belgium, and organic chemicals from the Republic of Ireland).
The Rest of the World
Non-EU goods exports rose by 7.3% in April (led by increases in car exports to China and mechanical machinery to New Zealand; chemicals and miscellaneous manufactured goods) and goods imports rose by 1.3% (led by machinery and transport equipment – aircraft from the US; manufactured materials and fuel imports).
Overall performance
On volumes (excluding inflation), total goods imports fell by 0.4% in April, with imports from the EU falling by 2.6%, and imports from the rest of the world rising by 2.6%. Total goods export volumes rose by 3.5% in April with non-EU goods exports up by 6.9% in April, while goods exports to the EU remained static.
Services exports rose by 0.6% and imports by 1% in April. Services exports still remain 0.3% below pre-pandemic levels in early 2020.
The UK trade deficit narrowed to £12.3bn in April – trade in services surplus rose by £1.9bn to £40.3bn
