Exports to EU remain weak

Published

25th March 2022

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The official figures for UK trade in January 2022 are now available although changes to the way HM Revenue and Customs (HMRC) collects data for both imports from and exports to the EU have led the Office for National Statistics (ONS) to warn that comparisons with previous months should be done with care.

Accepting this point, the British Chambers of Commerce (BCC) Head of Trade Policy William Bain has still highlighted that exports to the EU continued to fall in January.

Available at HERE, the ONS trade bulletin notes that total exports of goods, excluding precious metals, decreased by £2.5 billion (8.7%) in January 2022, driven by a £3.0 billion (20.7%) decrease in exports to EU countries.

Meanwhile, exports to non-EU countries increased by £0.6 billion (4.2%). The overall UK trade deficit rose to £21.3 billion in the three months to January 2022.

“ONS business insights and conditions data match our own”, Mr Bain said, “suggesting more traders experienced difficulties with paperwork on EU exports as 2021 went on, and in the early part of 2022. This is having a major effect on trade.”

The ONS assesses that two-thirds of the fall in goods exports was attributable to the collection method changes. This means at least £1 billion (around 7%) of the fall in goods exports in January is down to wider trade flow reasons.

Data for imports to Great Britain is now based on customs declarations, and month-on-month there was therefore a significant bump in imports of goods from the EU. HMRC says that this is reflective of genuine trade flows.

Rises in machinery and transport equipment imports from the EU were particularly pronounced under the new data collection method.

According to the BCC, a better comparison for trade flows is to look at 2018 against 2022. Compared with January 2018, goods exports were 10.4% down in January 2022 while imports rose by 15.6%. On the three-month averages to both dates, goods exports were down by 5.6% in the three months to January 2022 compared with the three months to January 2018 while imports rose by 10.1%.

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