UK trade: August 2020

• The UK total trade surplus, excluding non-monetary gold and other precious metals, increased £3.8 billion to £7.7 billion in the three months to August 2020, as exports grew by £21.4 billion and imports grew by a lesser £17.5 billion.

• The widening of the total trade surplus in the three months to August 2020, excluding non-monetary gold and other precious metals, was driven by an £11.9 billion increase in services exports, compared with a lesser £8.9 billion increase in services imports.

• The underlying trade in goods deficit narrowed in the three months to August 2020 driven by fuels, exports increased by £0.5 billion and imports decreased by £0.8 billion.

• The total trade balance for the month of August 2020, excluding non-monetary gold and other precious metals, increased by £1.5 billion to a surplus of £3.5 billion; exports grew by £0.8 billion whilst imports decreased by £0.7 billion.

• Removing the effect of inflation, the underlying total trade surplus widened to £6.9 billion in the three months to August 2020; exports increased by £19.2 billion and imports increased by a lesser £15.8 billion.

• In the 12 months to August 2020, the total trade balance, excluding non-monetary gold and other precious metals, increased by £33.9 billion to a surplus of £4.9 billion.

The total trade balance, excluding non-monetary gold and other precious metals, increased by £1.5 billion in August 2020, following a flat July, as exports rose and imports decreased in August (Table 1). Rising exports and falling imports in August were largely seen in fuels, and machinery and transport equipment. It should be noted, however, that monthly data are erratic and small movements in these series should be treated with caution.

The total trade surplus, excluding non-monetary gold and other precious metals, increased by £3.8 billion to £7.7 billion in the three months to August 2020 (Figure 1). The increase in the total trade surplus was because exports increased by £21.4 billion, while imports increased by a lesser £17.5 billion.

The trade in services surplus widened by £3.0 billion to £30.7 billion in the three months to August 2020. Services exports increased by £11.9 billion to £75.3 billion, while services imports rose by a lesser £8.9 billion to £44.6 billion. The increases in exports and imports were largely seen in other business services and financial services.

The underlying trade in goods deficit narrowed by £0.8 billion to £23.0 billion in the three months to August 2020 (Table 2). Goods exports increased by £9.4 billion to £75.8 billion, while goods imports increased by £8.6 billion to £98.8 billion. While the narrowing of the trade in goods deficit was largely because of increasing exports and decreasing imports of fuels, large increases in imports and exports of machinery and transport equipment, and miscellaneous manufactures were also seen (Figure 2).

This release covers UK trade data for June to August 2020. From the beginning of June, the UK began easing lockdown measures to combat the coronavirus (COVID-19) pandemic. Most of the UK’s top trading partners have been significantly affected by COVID-19, and the data in this release suggest evidence of pandemic-related impacts on UK trade.

The trade deficit in fuels narrowed in the three months to August 2020. The narrowing of the trade deficit in fuels was largely caused by increasing exports and decreasing imports with non-EU countries; exports increased 34.0%, while imports decreased 18.5%. Increasing exports to non-EU countries could be accounted for by the drop in oil production by Russia and the United States in July as countries turn to the UK to fulfil their demand.

The increases in imports and exports of machinery and transport equipment were largely seen in road vehicles, imports and exports increased £3.9 billion and £2.8 billion respectively in the three months to August 2020. Road vehicle exports to non-EU countries increased £1.7 billion, as demand for foreign vehicles increased. In the three months to August the manufacturing of cars for exporting increased by 150.4% compared with an increase in manufacturing for the UK market increasing only 54.7% in the same period.

Road vehicle imports increased by £3.9 billion in the three months to August 2020 as dealerships fully opened. UK car finance applications rose by a quarter during July and first few weeks of August as many car owners had extensions to renew their personal contract purchase contracts during lockdown, pushing purchases of new cars into the summer months.

Exports and imports of miscellaneous manufactures increased £2.5 billion and £2.6 billion respectively in the three months to August 2020, mostly driven by clothing and footwear. This aligns with the increase in retail sales of clothing seen in the three months to August, following sharp falls in March and April when lockdown measures were introduced.

Exports of precious metals decreased by £5.2 billion in the three months to August 2020, while imports increased by £0.9 billion. Including precious metals, the total trade surplus decreased by £2.3 billion to £7.2 billion in the three months to August 2020, driven by falling exports of non-monetary gold and other precious metals.

The trade in goods deficit with non-EU countries, excluding non-monetary gold and other precious metals, narrowed by £3.4 billion to £3.8 billion in the three months to August 2020. With EU countries, it grew by £2.6 billion, to £19.2 billion (Figure 3).

The narrowing of the underlying trade in goods deficit with non-EU countries was because of an increase of £6.1 billion in goods exports, while goods imports increased by a lesser £2.7 billion. Rising imports and exports to non-EU countries were largely seen in miscellaneous manufactures, machinery and transport equipment, and material manufactures.

The widening of the trade in goods deficit with EU countries, excluding precious metals, was because of a £5.9 billion rise in goods imports, while goods exports grew by a lesser £3.3 billion. Increasing goods imports from EU countries were largely seen in machinery and transport equipment, and miscellaneous manufactures. Rising exports to EU countries were also largely because of machinery and transport equipment although to a lesser extent than the increase in imports.

This section presents volume and price estimates of UK trade exports, imports and balances, using chained volume measures (CVMs) and implied deflators (IDEFs). For more details on these terms, see Section 10 of this release.

In volume terms, the total trade surplus (goods and services), excluding unspecified goods (which includes non-monetary gold), widened in the three months to August 2020, as exports increased by £19.2 billion and imports increased by a lesser £15.8 billion (Table 3, Figure 4).

Total trade import prices increased 1.4% in the three months to August 2020, while export prices rose 1.3%. The rises in export and import prices were largely driven by an increase of 17.0% in import and 27.5% in export fuels prices.

Explore the 2019 trade in goods data using our interactive tools. Our data breaks down UK trade in goods with 234 countries by 125 commodities.

Use our map to get a better understanding of what goods the UK traded with a particular country. Select a country by hovering over it or using the drop-down menu.

Notes:

1. Because of a very demanding set of changes in the 2020 national accounts annual update, we have been unable to include the top five imports and exports of goods in the interactive map. Data can be found in the country and commodity datasets published alongside this release and we will update within next months publication on 12 November 2020.

2. For more information about our methods and how we compile these statistics, please see Trade in goods, country-by-commodity experimental data: 2011 to 2016. Users should note that the data published alongside this release are official statistics and no longer experimental.

3. These data are our best estimate of these bilateral UK trade flows. Users should note that alternative estimates are available, in some cases, through the statistical agencies for bilateral countries or through central databases such as UN Comtrade.

4. Interactive maps denote country boundaries in accordance with statistical classifications set out within Appendix 4 of the Balance of Payments (BoP) Vademecum (PDF, 1.1MB).

You can also explore the 2019 trade in goods data by commodity, for example, car exports to the EU and UK tea or coffee imports.

Select a commodity from the drop-down menu or click through the levels to explore the data.

Notes:

1. For more information about our methods and how we compile these statistics, please see Trade in goods, country-by-commodity experimental data: 2011 to 2016. Users should note that the data published alongside this release are no longer experimental.

2. These data are our best estimate of these bilateral UK trade flows. Users should note that alternative estimates are available, in some cases, via the statistical agencies for bilateral countries or through central databases such as UN Comtrade.

3. Interactive maps denote country boundaries in accordance with statistical classifications set out within Appendix 4 of the Balance of Payments (BoP) Vademecum (PDF, 1.1MB).

The total trade balance (goods and services), excluding non-monetary gold and other precious metals, increased by £33.9 billion to a £4.9 billion surplus in the 12 months to August 2020, as imports fell by more than exports (Table 4).

The increase of the underlying total trade balance in the 12 months to August 2020 was largely because of a £37.5 billion narrowing of the trade in goods deficit (Table 4). Imports of goods decreased by £76.9 billion, while exports decreased by a lesser £39.4 billion. The fall in imports and the lesser fall in exports of machinery and transport equipment accounts for the largest increase in the trade balance.

The narrowing of the underlying trade in goods deficit in the 12 months to August 2020 was mainly because of a £20.1 billion narrowing of the deficit with EU countries to £78.5 billion, while the deficit with non-EU countries narrowed by a lesser £17.5 billion to £23.5 billion.

The trade in services surplus narrowed by £3.6 billion to £106.9 billion in the 12 months to August 2020, as exports fell by £18.7 billion and imports fell by a lesser £15.0 billion.

In accordance with the National Accounts Revisions Policy, the data in this release have been revised back to January 1997 when compared with trade figures published in our previous trade bulletin on 11 September 2020. Data in this release are consistent with estimates published in the quarterly gross domestic product (GDP), sector and financial accounts (SFA), and balance of payments (BoP), consistent with Blue Book 2020, published on 30 September 2020.

Details have already been provided on the scope of Blue Book 2020 in the article Latest developments and changes to be implemented in Blue Book and Pink Book 2020. Indicative impacts on headline gross domestic product (GDP) components for the years 1997 to 2018 were published on 20 July 2020 in Impact of Blue Book 2020 changes on current price and volume estimates of gross domestic product. Indicative impacts on the balance of payments for the years 1997 to 2018 were published on 7 September 2020 in Detailed assessment of changes to sector and financial accounts, balance of payments and quarterly GDP: 1997 to 2018.

Trade balance

The trade balance is the difference between exports and imports or exports minus imports. When the value of exports is greater than the value of imports, the trade balance is in surplus. When the value of imports is greater than the value of exports, the trade balance is in deficit. The balance is sometimes referred to as “net exports”.

Inflation

Inflation is the change in the average price level of goods and services over a period of time.

Chained volume measures (CVMs)

A CVM is a “real” measure in that it has had the effect of inflation removed to measure the change in volume between consecutive periods, fixing the prices of goods and services in one period (the base year).

Implied deflators (IDEFs)

An IDEF shows the implied change in average prices for the respective components of the trade balance, for example, the IDEF for imports will show the average price movement for imports.

Precious metals and non-monetary gold

Precious metals include non-monetary gold, silver, platinum and palladium, and it forms part of the commodity group “unspecified goods”. Non-monetary gold comprises the majority of this group and is the technical term for gold bullion not owned by central banks.

A full Glossary of economic terms is available.

Revisions policy

The revisions policy for this release will be changing to align with the rest of the Office for National Statistics’s (ONS’s) national accounts. The impact of this will be minimal and will only affect the publication in the third month of a quarter where we will see a reduced period of revision. These revisions will continue to be shown within the final quarterly estimate of Gross domestic product and Quarterly national accounts publications at the end of the quarter. The first publication that this will affect will be on 10 December 2020.

Coronavirus data impacts

In light of the challenges with data collection from social distancing measures put in place because of the coronavirus (COVID-19), we have experienced challenges around the level of survey and data returns for this trade release.

International Trade in Services (ITIS) Survey

Data from the ITIS survey make up over 50% of trade in services data. This release incorporates data collected from the quarterly ITIS survey, which is sent to around 2,200 businesses. As a result of the coronavirus, many businesses have moved to a working from home arrangement or suspended trade, causing a lower response to the survey than usual.

In order to maintain the quality of the survey, we have developed improved imputation methods where we do not have actual data. We have utilised information from other surveys alongside expert guidance to implement these methods and quality assure the data. We continue to review and refine these methods, along with the associated survey methods, to ensure the data are as robust as possible. Alongside this, ITIS data collection has now been moved to online methods, enabling businesses to respond to the survey using spreadsheets, rather than paper, which can then be emailed back to us.

International Passenger Survey

Data from the International Passenger Survey (IPS) are the main source for travel services, making up around 8% of total trade. With the IPS suspended from 16 March 2020 we have been investigating alternative ways to continue to measure these services in the future.

We have worked with the ONS Data Science Campus to create new estimates using alternative data sources. The data sources that have been used include the Civil Aviation Authority, Eurotunnel, the Consumer Prices Index including owner occupiers’ housing costs (CPIH), airline stock figures and aggregated and anonymised foreign-issued card spend processed through Barclays Point-of-Sale (POS) and “card-not present” channels.

We will continue to develop these estimates over the coming months and any improvements may result in larger than usual revisions for travel services.

UK trade data

Unless otherwise specified, data within this bulletin are in current prices (CPs). This means they have not been adjusted to remove the effects of inflation.

UK trade data within our monthly trade bulletin are published at around a six-week lag because of the timeliness of source data. For example, the December 2020 publication will include data up to the end of October 2020.

After EU withdrawal

As the UK leaves the EU, it is important that our statistics continue to be of high quality and are internationally comparable. During the transition period, those UK statistics that align with EU practice and rules will continue to do so in the same way as before 31 January 2020. We will continue to produce statistics broken down to EU and non-EU aggregates.

After the transition period, we will continue to produce our international trade statistics in line with the UK Statistics Authority’s Code of Practice for Statistics and in accordance with internationally agreed statistical guidance and standards. This is based on the International Monetary Fund’s (IMF’s) Balance of Payments and International Investment Position Manual sixth edition (BPM6) (PDF, 3.0MB), until those standards are updated.

Data published in UK trade statistical releases also form part of the broader system of UK National Accounts, which will be produced in line with international standards as laid down in the European System of Accounts (ESA) 2010 until the EU budgets are finalised for the years in which we were a member, as specified in the Withdrawal Agreement.

Precious metals

In line with international standards, the ONS’s headline trade statistics contain the UK’s exports and imports of non-monetary gold.

Because a significant amount of the world’s trade in non-monetary gold takes place on the London markets, this trade can have a large impact on the size of and change in the UK’s headline trade figures. We present time series data for precious metals as well as total trade excluding this commodity, which may provide a better guide to the emerging trade picture. This includes precious metals and trade excluding precious metals by EU and non-EU countries.

Data on non-monetary gold and other precious metals are obtained from the Bank of England (BoE), who provide a balanced figure (exports less imports). We attribute the balanced data to either exports or imports, depending on whether the data are positive (that is, exports are greater than imports) or negative (that is, exports are less than imports) respectively. Once received from the BoE, the ONS smooths the precious metals data to ensure individual responses cannot be disclosed.

More information about the ONS’s recording of non-monetary gold is available.

Methodology

Trade is measured through both exports and imports of goods and services. Data are supplied by over 30 sources including several administrative sources, with HM Revenue and Customs (HMRC) being the largest for trade in goods.

Detailed methodological notes are published in the UK Balance of Payments, The Pink Book: 2019.

The UK trade methodology web pages have been developed to provide detailed information about the methods used to produce UK trade statistics.

More quality and methodology information on strengths, limitations, appropriate uses, and how the data were created is available in the UK trade QMI.

National Statistics designation status

The UK Statistics Authority suspended the National Statistics designation of UK trade (PDF, 72KB) on 14 November 2014. We have now responded to all of the specific requirements of the reassessment of UK trade and, as part of our engagement with the Office for Statistics Regulation team, we are sharing our continuous improvement and development plans to support UK trade statistics regaining National Statistics status. We welcome feedback on our new trade statistics, developments and future plans. If you have any comments, please email them to trade@ons.gov.uk.

We are undertaking a programme of improvements to UK trade statistics in line with the UK trade development plan, including more detail and improvements now published to address anticipated future demands. On 24 October 2018, we published an article outlining our achievements so far and forward look with regards to the transformation of our trade statistics.

Trade asymmetries

These data are our best estimates of bilateral UK trade flows, compiled following internationally agreed standards and using a wide range of robust data sources. However, in some cases, alternative estimates of bilateral trade flows are available from the statistical agencies for the relevant countries or through central databases such as UN Comtrade.

Differences between estimates are known as trade asymmetries and are a known aspect of international trade statistics, affecting bilateral estimates across the globe, not just in the UK.

We are heavily engaged in analysis of these asymmetries, developing strong bilateral relationships with other countries to understand, explain and potentially reduce them. We have published a series of analyses showing comparisons and the relative strengths of different estimates, which users may wish to reference to help them better understand the quality of our bilateral trade estimates.