UK’s International Trade Slows – Reaches Highest Deficit Level Since 2016
According to recent research conducted by Market Inspector, the UK’s international trade declines, as it reached a deficit of –£22.3 billion in the first quarter of 2019. Furthermore, during the same period, the UK reached a trade deficit of –£3.0 billion with non-EU countries, for the first time in the last few years.
Exports and imports comprise a big part of the countries’ GDP, and therefore, have an influence on it, and the currency’s exchange rates. In addition, as the UK’s GDP is dropping and the annual inflation is rising, it makes sense to take a look at the UK’s international trade.
Who Are the UK’s Top Trade Partners?
When it comes to the export of goods and services, according to the governmental data, the UK’s top five export partners for 2018 included the United States (£118.2 billion), followed by Germany (£55.4 billion), the Netherlands (£44.0 billion), France (£42.1 billion), and Ireland (£38.3 billion).
As the United States are the UK’s biggest export partner, it might be interesting to mention what goods the country is exporting the most. As reported by the HM Revenue and Customs, the UK exported £49.2 billion worth of goods to the US goods in 2018.
The most-exported category of goods was nuclear reactors, boilers, machinery, and mechanical appliances (£8.8 billion). The second-most exported category of goods was vehicles other than railway or tramway rolling-stock, and parts and accessories (£8.3 billion), and third was pharmaceutical products (£4.9 billion).
SafeSubcribe/Instant Unsubscribe - One Email, Every Sunday Morning - So You Miss Nothing - That's It
While the UK exported the most to the United States, most of the top ten export markets were European countries. Most importantly, the export to the EU reached its highest point in the fourth quarter of 2018 with £74.6 billion. The main export destinations included Germany (£55.4 billion), the Netherlands (£43.9 billion), and France (£42.1 billion).
Some other key findings from the report include the UK’s fastest-growing export markets. For example, in the period between 2010 and 2018, the export to North Macedonia had a growth of 483% (£1.5 billion). Some of the other growing markets were Gibraltar with 253% (£3.0 billion), South Korea with 220% (£9.8 billion), Kazakhstan with 199% (£2.2 billion), and Oman 161% (£1.6 billion).
Overall, the UK export for 2018 was worth £634 billion, of which £288.9 billion was to the EU and £345.1 billion was to non-EU countries.
When it comes to the UK’s import partners, on the top was Germany (£77.3 billion), followed by the United States (£72.4 billion), the Netherlands (£49.1 billion), China (£45.4 billion), and France (£42.8 billion). In addition, all of the UK’s global import partners can be seen on the interactive map below:
The most imported goods from the United States for 2018 included products from the nuclear reactors, boilers, machinery, and mechanical appliances category (£10.2 billion), followed by natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad with precious metal (£6.0 billion), and mineral fuels, mineral oils and products of their distillation (£4.6 billion).
According to the data, EU countries remained the UK’s main import partners. Moreover, imports from the EU reached their highest during the first quarter of 2019 with £93.6 billion. On the other side, the statistics show that imports from non-EU countries are also increasing in recent years.
Additionally, in the period between 2010 and 2018, the UK has extended their import relationships with Vietnam, which had a growth of 243% (£4.5 billion), followed by Saudi Arabia with 201% (£3.7 billion), Algeria with 166% (£2.3 billion), Bangladesh with 131% (£3.0 billion), and Romania with 129% (£3.4 billion).
In general, the UK imported goods and services worth £665.0 billion. Imports from the EU accounted for £352.8 billion, whereas imports from non-EU countries was worth £312.1 billion.
The UK’s Trade Balance with EU and Non-Eu Countries
The UK has been continuously running a trade deficit since 1998. This means that the country is importing more than it is exporting. Furthermore, in 2018, the trade deficit was 1.5% of the GDP.
Most importantly, in the first quarter of 2019, the UK had a trade deficit for the first time in recent years with non-EU countries, which accounted for -£3.0 billion. In comparison, the trade deficit with the EU for the same period was -£19.3 billion.
Overall, the UK’s exports and imports share of the national GDP was 61.8% in 2018. The exports share was 30% of GDP, whereas the import was 31.8% of GDP. The fact that the UK’s international trade comprise more than half of the country’s GDP is another confirmation of its importance.