UK trade deficit narrows by £5.6 illion in Q4 2016. Goods exports up 10.4%

worldtraveller

The UK’s trade deficit in goods and services narrowed in December last year, according to official figures released by the Office for National Statistics.

The data shows that for the fourth quarter of 2016, the deficit narrowed to £8.6bn, down £5.6bn from the previous quarter.

"Exports of goods increased by 10.4 per cent quarter-on-quarter, whereas imports of goods increased by less (0.9 per cent) during the same period," the ONS said.

Independent

Main points

• The UK trade deficit on goods and services narrowed to £8.6 billion in Quarter 4 (Oct to Dec) 2016, following a sharp widening of the deficit in Quarter 3 (July to Sept) 2016; this narrowing was predominantly due to an increase in exports of goods to non-EU countries.
• At the commodity level, the main causes of the narrowing of the deficit in Quarter 4 were increased exports of non-monetary gold, oil and aircraft as well as a decrease in imports of non-monetary gold.
• Exports and imports of goods excluding oil and erratics have grown between each consecutive quarter of 2016; the deficit on goods excluding oil and erratics continued to widen in each quarter in 2016 because the import values increased more than exports.
• Exports of goods to both EU and non-EU countries have increased through most of 2016, but there was a much higher quarter-on-quarter growth in exports to non-EU countries in Quarter 4 2016, following a fall in Quarter 3.
• The UK’s deficit on trade in goods and services was £3.3 billion in December 2016, a narrowing of £0.3 billion, which is contributing to the narrowing in Quarter 4 2016.
• Between 2015 and 2016 the UK’s deficit on trade in goods and services widened to £39.4 billion, with the large deficit in Quarter 3 2016 contributing most compared with other quarters.

ONS

It looks like the drop in the value of GPB may well now be helping to boost exports of goods & services, especially to non-EU countries, which is probably also helping to drive the increase in UK manufacturing.

GDB2222

Quarter 3 was presumably much worse than Q2? J curve effect is well known.

Still, things are good for UK employers at the moment. We've devalued by 20%, and we are still part of the EU. So, that's the best of all possible worlds for them.

Sapphire

With regard to UK manufacturing, I was talking to someone at a Mulberry shop the other day and she said that people are really keen to buy goods with the 'Made in England' brand, something that used to be a sign of quality, and that you saw a lot of on all sorts of household goods, not just expensive items. She said Chinese people are particularly interested in things made in Britain, and always ask where items are made.

I have to say I share something of the disappointment of would-be 'Made in England' buyers, especially when I see that British, American, French and Italian high-quality clothing is often not made in those countries, but in the developing world (probably with poor conditions for the workforce). I always ask in shops where things are made, and make my views known – people do listen and agree! In fact, I have tended to be put off buying things like this, especially when it comes to branded items.

As my sister said the other day, Britain does seem to be missing a trick here. I'm sure there would be a demand for quality British goods especially, and that people would pay above the odds for them. I know bits of British manufacturing are coming back, but there could be more. We used to be so good at this stuff (with centuries of brilliant manufacturing behind us), and there are still people left with the skills…

westernpromise

A friend of mine runs a clothing manufacturing company in London - one of very few left - and his USP is that his stuff does not come from China on three months' lead time (which means that once shipped orders can't be altered). That said, all his workers are east European or Asian. His stuff is made in Britain and tagged as such, but by exactly the same people who previously used to make it in Slovenia, Turkey and India. So I'm not sure what difference it should make to the Billy Bunters, because the jobs preserved by buying because of the "made in Britain" label are in his case jobs filled wholly by immigrants to Britain.

Sapphire

westernpromise wrote: »

A friend of mine runs a clothing manufacturing company in London - one of very few left - and his USP is that his stuff does not come from China on three months' lead time (which means that once shipped orders can't be altered). That said, all his workers are east European or Asian. His stuff is made in Britain and tagged as such, but by exactly the same people who previously used to make it in Slovenia, Turkey and India. So I'm not sure what difference it should make to the Billy Bunters, because the jobs preserved by buying because of the "made in Britain" label are in his case jobs filled wholly by immigrants to Britain.

Yes, I am aware of that. Many Eastern Europeans, for example, are taught to embroider and do other crafts from an early age, so they still have the skills when they are adults. Perhaps British children should be encouraged to take up such skills in school, like they once were? It's also true to say that 'Made in England' goods were often (though not always) made by 'foreigners' in the past, whether by Huguenot weavers with their highly refined textiles, or the Jewish community, or others. There were also British companies that may have employed people from elsewhere, but were run by Brits, who supervised and created the goods.

I was merely pointing out that there is a demand for (especially) luxury 'Made in England' goods by wealthy individuals (is that what you mean by 'Billy Bunters'?).

'Made in China' has the same stigma attached to it for some as 'Made in Hong Kong' did in the past.

davomcdave

worldtraveller wrote: »

The UK’s trade deficit in goods and services narrowed in December last year, according to official figures released by the Office for National Statistics.

The data shows that for the fourth quarter of 2016, the deficit narrowed to £8.6bn, down £5.6bn from the previous quarter.

"Exports of goods increased by 10.4 per cent quarter-on-quarter, whereas imports of goods increased by less (0.9 per cent) during the same period," the ONS said.

Independent

Main points

• The UK trade deficit on goods and services narrowed to £8.6 billion in Quarter 4 (Oct to Dec) 2016, following a sharp widening of the deficit in Quarter 3 (July to Sept) 2016; this narrowing was predominantly due to an increase in exports of goods to non-EU countries.
• At the commodity level, the main causes of the narrowing of the deficit in Quarter 4 were increased exports of non-monetary gold, oil and aircraft as well as a decrease in imports of non-monetary gold.
• Exports and imports of goods excluding oil and erratics have grown between each consecutive quarter of 2016; the deficit on goods excluding oil and erratics continued to widen in each quarter in 2016 because the import values increased more than exports.
• Exports of goods to both EU and non-EU countries have increased through most of 2016, but there was a much higher quarter-on-quarter growth in exports to non-EU countries in Quarter 4 2016, following a fall in Quarter 3.
• The UK’s deficit on trade in goods and services was £3.3 billion in December 2016, a narrowing of £0.3 billion, which is contributing to the narrowing in Quarter 4 2016.
• Between 2015 and 2016 the UK’s deficit on trade in goods and services widened to £39.4 billion, with the large deficit in Quarter 3 2016 contributing most compared with other quarters.

ONS

It looks like the drop in the value of GPB may well now be helping to boost exports of goods & services, especially to non-EU countries, which is probably also helping to drive the increase in UK manufacturing.

Generally speaking it's better to compare year-on-year data rather than quarter-on-quarter. Can anyone think of a Chistmassy event in the 4th quarter of the year that might skew trade data?

So what happened on an annual basis?

Between 2015 and 2016, the total trade deficit widened by £9.6 billion to £39.4 billion as imports increased more than exports. There was a £29.3 billion increase in imports of goods, with 61.2% of this rise coming from EU countries.

That's GDB's J-curve right there. What should happen next is imports fall and exports rise, i.e. living standards fall.

Thrugelmir

westernpromise wrote: »

A friend of mine runs a clothing manufacturing company in London - one of very few left - and his USP is that his stuff does not come from China on three months' lead time (which means that once shipped orders can't be altered). That said, all his workers are east European or Asian. His stuff is made in Britain and tagged as such, but by exactly the same people who previously used to make it in Slovenia, Turkey and India. So I'm not sure what difference it should make to the Billy Bunters, because the jobs preserved by buying because of the "made in Britain" label are in his case jobs filled wholly by immigrants to Britain.

To learn skills you need people to teach them. If it requires immigrant workers so be it. Many skills are dying out. Rebuilding them to a sizable base is challenging.

Thrugelmir

worldtraveller wrote: »

It looks like the drop in the value of GPB may well now be helping to boost exports of goods & services, especially to non-EU countries, which is probably also helping to drive the increase in UK manufacturing.

Around 55% of the content used in cars manufactured in the UK is imported. Not as black and white as it may appear. When it comes to manufacturing bridging the deficit gap. Global companies use global supply chains.

GDB2222

westernpromise wrote: »

So I'm not sure what difference it should make to the Billy Bunters, because the jobs preserved by buying because of the "made in Britain" label are in his case jobs filled wholly by immigrants to Britain.

I hear you, but there is one practical difference. The immigrants are living here, so they are spending most of their wages here (apart from the bit they save or send back to their families), which adds to the UK economy, rather than the economy where they originally came from.

GDB2222

Thrugelmir wrote: »

To learn skills you need people to teach them. If it requires immigrant workers so be it. Many skills are dying out. Rebuilding them to a sizable base is challenging.

There must still be some expert tool-makers in the UK, but not many.

westernpromise

Sapphire wrote: »

(is that what you mean by 'Billy Bunters'?).

"Billy Bunters" = "punters"