UK trade: March 2020

• The total trade deficit, excluding non-monetary gold and other precious metals, narrowed by £1.3 billion to £2.3 billion in Quarter 1 (Jan to Mar) 2020.

• The narrowing of the underlying total trade deficit in Quarter 1 2020 was largely driven by a £13.3 billion fall in imports, partly offset by a £12.0 billion fall in exports.

• The trade in goods deficit, excluding non-monetary gold and other precious metals, narrowed £1.5 billion in Quarter 1 2020, driven by a £2.5 billion narrowing with EU countries, partly offset by a £1.0 billion widening with non-EU countries.

• Removing the effect of inflation, the total trade deficit in volume terms, excluding unspecified goods (which includes non-monetary gold), narrowed by £3.6 billion to £0.4 billion in Quarter 1 2020.

• Including non-monetary gold and other precious metals, the total trade balance decreased by £12.7 billion to a deficit of £4.8 billion in Quarter 1 2020.

• The total trade deficit narrowed by £37.4 billion to £8.6 billion in the 12 months to March 2020.

The total trade deficit, excluding non-monetary gold and other precious metals, narrowed £1.3 billion to £2.3 billion in Quarter 1 (Jan to Mar) 2020 (Figure 1). The narrowing of the deficit was because of imports falling £13.3 billion to £165.3 billion, largely offset by a £12.0 billion fall in exports to £163.0 billion.

The narrowing of the underlying total trade deficit was largely driven by a £1.5 billion narrowing of the trade in goods deficit to £25.6 billion.

Goods imports fell £8.0 billion to £110.4 billion, partly offset by a £6.5 billion fall in goods exports to £84.7 billion. Falling imports of goods were seen largely in machinery and transport equipment, fuels, miscellaneous manufactures and chemicals, which fell by £3.7 billion, £1.2 billion, £1.2 billion and £1.0 billion respectively.

Falling goods exports were seen largely in machinery and transport equipment, miscellaneous manufactures and chemicals, which fell by £3.4 billion, £1.3 billion and £1.2 billion respectively.

The decreases in both imports and exports of machinery and transport equipment, and chemicals, were seen largely in road vehicles, and medicinal and pharmaceutical products respectively. Falling imports and exports of miscellaneous manufactures were seen largely in other manufactures and clothing.

The trade in services surplus narrowed £0.2 billion to £23.4 billion in Quarter 1 2020. Services exports fell £5.5 billion to £78.3 billion, while services imports fell by a lesser £5.3 billion to £55.0 billion.

Exports of precious metals fell £9.6 billion in Quarter 1 2020, while imports rose £4.5 billion. Including precious metals, the total trade balance decreased £12.7 billion to a deficit of £4.8 billion in Quarter 1 2020, driven by a widening of the trade in goods deficit (Figure 2, Table 1).

This release covers UK trade data for Quarter 1 (Jan to Mar) 2020, during which the UK as well as many of its major trading partners introduced lockdown measures to combat the coronavirus (COVID-19). Most of the UK's top trading partners have been significantly affected by the coronavirus and the data in this release may show some evidence of the coronavirus-related impacts on UK trade.

The monthly total trade deficit for March 2020, excluding precious metals, widened £3.6 billion to £3.7 billion, as exports fell £7.1 billion and imports fell by a lesser £3.5 billion. This followed a £1.5 billion decrease to the total trade balance, excluding precious metals, in February, to a deficit of £0.1 billion, driven by a £3.6 billion fall in exports and £2.1 billion fall in imports.

Falling imports from China were seen in February and March 2020, particularly in material manufactures, machinery and transport equipment, and miscellaneous manufactures.

However, while we expect coronavirus restrictive measures to impact on international trade and the movements of goods and services, there is currently no conclusive evidence that this was because of the coronavirus. It should also be noted that monthly data are erratic and small movements in these monthly series should be treated with caution.

Furthermore, the widespread disruption to the UK has introduced a number of constraints on operations that directly impact how we collect estimates of trade flows. The Office for National Statistics (ONS) has prioritised assessment of data supplies to give early signal of potential data gaps and/or reduction in data quality. Fuller details on steps we are undertaking are in Section 11.

For more information regarding the impacts of the coronavirus on the UK economy, please see the GDP first quarterly estimate release.

Figure 2: Quarter 1 2020 saw a widening of the total trade deficit, largely caused by a widening of the trade in goods deficit

Changes in the UK trade balances, exports and imports, Quarter 1 (Jan to Mar) 2020 compared with Quarter

Source: Office for National Statistics – UK trade

Notes:

1. The arrow direction indicates whether a component has increased or decreased, while the colour denotes the impact the direction of a movement has on the trade balance. For example, an increase in imports is denoted by an upward red (dark) arrow, as a rise in imports has a negative impact on the trade balance. An increase in the trade in goods deficit will be indicated by an upwards red (dark) arrow as this would have a negative impact on the balance.

Download this image Figure 2: Quarter 1 2020 saw a widening of the total trade deficit, largely caused by a widening of the trade in goods deficit

.PNG (48.5 kB) .pptx (61.9 kB)

The trade in goods deficit, excluding non-monetary gold and other precious metals, narrowed by £2.5 billion to £19.9 billion with EU countries in Quarter 1 (Jan to Mar) 2020. The trade in goods deficit, excluding precious metals, with non-EU countries widened £1.0 billion to £5.8 billion (Figure 3).

The narrowing of the trade in goods deficit, excluding precious metals, with EU countries was because of a £5.6 billion fall in goods imports to £58.5 billion, while goods exports fell by a lesser £3.2 billion to £38.6 billion.

Falling goods imports from EU countries were seen largely in machinery and transport equipment, and chemicals, which fell by £3.1 billion and £1.1 billion respectively. Falling exports to EU countries were largely because of machinery and transport equipment, and fuels, which fell by £1.6 billion and £0.7 billion respectively.

The widening of the trade in goods deficit, excluding precious metals, with non-EU countries, was because of a £3.3 billion fall in goods exports to £46.1 billion, partly offset by a £2.3 billion fall in goods imports to £51.9 billion.

Falling goods exports to non-EU countries were seen largely in machinery and transport equipment, and miscellaneous manufactures, which fell by £1.9 billion and £1.1 billion respectively. Falling imports from non-EU countries were largely driven by fuels, miscellaneous manufactures, and machinery and transport equipment, which fell by £0.7 billion, £0.7 billion and £0.6 billion respectively.

Precious metals saw a large fall in exports to non-EU countries in Quarter 1 2020. Exports fell by £9.2 billion, while imports rose by a lesser £4.5 billion. Including precious metals, the trade in goods balance with non-EU countries decreased £14.7 billion to a deficit of £8.5 billion.

Exports of precious metals to EU countries fell by a lesser £0.4 billion. Therefore, the trade in goods deficit with EU countries, including precious metals, narrowed by £2.1 billion to £19.6 billion in Quarter 1 2020.

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 deficit (goods and services), excluding unspecified goods (which includes non-monetary gold), narrowed by £3.6 billion to £0.4 billion in Quarter 1 (Jan to Mar) 2020. The narrowing of the total trade deficit was largely because of a narrowing of the trade in goods deficit (Figure 4).

The trade in goods deficit in volume terms, excluding unspecified goods, narrowed £2.5 billion to £22.9 billion, as imports fell £7.8 billion and exports fell by a lesser £5.4 billion.

Falling imports were seen largely in machinery and transport equipment, miscellaneous manufactures and material manufactures, which fell by £4.4 billion, £1.4 billion and £1.0 billion respectively. Falling exports were seen largely in machinery and transport equipment, chemicals and miscellaneous manufactures, which fell by £3.1 billion, £1.5 billion and £1.2 billion respectively.

The trade in services surplus in volume terms widened by £1.2 billion to £22.5 billion in Quarter 1 2020, driven by a £5.3 billion fall in services imports, largely offset by a £4.2 billion fall in services exports.

Exports of unspecified goods fell £8.8 billion In Quarter 1 2020, while imports rose by a lesser £4.5 billion. Therefore, the total trade deficit in volume terms, including unspecified goods, decreased £9.7 billion to a deficit of £3.1 billion in Quarter 1 2020, driven by a widening of the trade in goods deficit.

Total trade export prices fell 0.8% in Quarter 1 2020, largely driven by a 1.2% fall in services export prices. Total trade import prices rose 0.4% in Quarter 1 2020, largely driven by a 0.7% rise in services import prices.

Explore the 2019 trade in goods data using our interactive tools. Our data break 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.

Data download

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 official statistics and 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, through 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).

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 deficit (goods and services) narrowed by £37.4 billion to £8.6 billion in the 12 months to March 2020, mainly because of a £47.5 billion narrowing of the trade in goods deficit to £108.5 billion. Total exports increased by £27.7 billion to £694.3 billion, whereas imports decreased by £9.7 billion to £702.9 billion, in the 12 months to March 2020.

Imports of goods decreased by £33.5 billion to £477.4 billion, while exports increased £14.0 billion to £369.0 billion (Figure 5, Table 2).

Rising exports were largely because of precious metals and miscellaneous manufactures, which increased by £14.6 billion and £6.5 billion respectively. This was partially offset by a fall in exports of fuels of £7.1 billion.

The £33.5 billion decrease of goods imports to £477.4 billion was caused by fuels, machinery and transport, chemicals and precious metals, which decreased by £7.9 billion, £7.9 billion, £7.7 billion and £5.2 billion respectively.

The trade in services surplus narrowed £10.1 billion to £99.9 billion in the 12 months to March 2020, as imports increased by £23.8 billion to £225.4 billion and exports increased by a lesser £13.7 billion to £325.3 billion. Excluding non-monetary gold and other precious metals, the total trade deficit narrowed £17.6 billion to £15.4 billion.

Figure 5: The trade deficit narrowed in the 12 months to March 2020, largely because of a narrowing in the trade in goods deficit

Changes to the UK trade balances, exports and imports, 12 months to March 2020 compared with 12 months to March 2019

Source: Office for National Statistics – UK trade

Notes:

The arrow direction indicates whether a component has increased or decreased, while the colour denotes the impact the direction of a movement has on the trade balance. For example, an increase in imports is denoted by an upward red (dark) arrow, as a rise in imports has a negative impact on the trade balance. An increase in the trade in goods deficit will be indicated by an upward red (dark) arrow as this would have a negative impact on the balance.

Download this image Figure 5: The trade deficit narrowed in the 12 months to March 2020, largely because of a narrowing in the trade in goods deficit

.PNG (48.1 kB) .pptx (61.7 kB)

The trade in goods deficit with non-EU countries narrowed by £37.9 billion to £20.5 billion in the 12 months to March 2020, while with EU countries it narrowed by £9.6 billion to £87.9 billion (Figure 6).

The narrowing of the trade in goods deficit with non-EU countries was mainly because of a £25.6 billion increase in exports to £204.9 billion, while imports fell by £12.3 billion to £225.5 billion. Rising exports to non-EU countries were largely caused by non-monetary gold and other precious metals, and miscellaneous manufactures, which rose by £13.6 billion and £6.8 billion respectively.

The decrease in non-EU imports was largely caused by fuels and precious metals, which fell by £5.2 billion and £5.0 billion respectively.

The narrowing of the trade in goods deficit with EU countries in the 12 months to March 2020 was because of a £21.2 billion fall in imports to £252.0 billion, whereas exports fell by £11.6 billion to £164.0 billion.

Falling imports from EU countries were largely because of machinery and transport equipment, and chemicals, which decreased by £7.3 billion and £6.0 billion respectively.

The fall in EU exports was caused by chemicals, machinery and transport equipment, and fuels, which fell by £4.0 billion, £3.1 billion and £2.8 billion respectively.

In accordance with the National Accounts Revisions Policy, data in this release have been revised back from January 2020.

The total trade surplus for January 2020 was revised up (widening of the surplus) by £1.0 billion to £3.4 billion. The upward revision to the total trade surplus was largely driven by a £1.7 billion upward revision to services exports, partially offset by a £0.6 billion upward revision to services imports.

The total trade deficit for February 2020 was revised up (narrowing of the deficit) by £1.3 billion to £1.5 billion. The upward revision to the total trade deficit was caused by a £2.1 billion downward revision to goods imports, largely because of a £1.8 billion downward revision to unspecified goods (which includes non-monetary gold). This was partially offset by a £0.4 billion downward revision to goods exports.

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.

Erratics

Erratics are a specific group of commodities that are extremely influential on trade in goods. They often mask the underlying trend in the export or import values because of their volatility. The “erratics” series includes ships, aircraft, precious stones, silver and non-monetary gold.

Non-monetary gold

Non-monetary gold is the technical term for gold bullion not owned by central banks.

Precious metals

Precious metals includes 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.

A full Glossary of economic terms is available.

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

The ITIS is a paper-based survey sent to a number of UK businesses. Data from the ITIS survey make up over 50% of trade in services data, making it a particularly important aspect of our trade numbers. 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.

Given these challenges, the Office for National Statistics (ONS) continues to review the data and methodologies to see what additional measures could be put in place to help inform these estimates, and to ensure our statistics are of good quality.

We have developed models to assist in the quality assurance of ITIS data, which use alternative data sources such as Index of Services (IoS) and Index of Production (IoP) to estimate ITIS data. We have used these alongside actual ITIS survey data, external indicators, information from other ONS surveys, and expert guidance to supplement and quality assure the survey data. We continue to review and refine these models, along will the associated survey methods, to ensure the data are as robust as possible.

Alongside this, work is also underway to move ITIS data collection to online methods. Soon, businesses will be able to respond to the survey using spreadsheets, rather than paper, which can then be emailed back to us. We are also exploring the option of moving the ITIS survey fully online, along with a number of other surveys across the ONS.

International Passenger Survey (IPS)

Data from the IPS are the main source for travel services, making up over 20% of trade in services data. With the IPS suspended on 16 March 2020, finding a new data source or statistical model has been high priority.

To provide an estimate of travel services data during this period, the ONS has explored a range of alternative data sources to supplement IPS data and to ensure the publication of reliable figures. The ONS has worked with other conceptually similar data sources to provide figures for March 2020 and is also currently looking at modelling alternative data sources, with the help of the Data Science Campus, to provide an alternative to IPS data during this period.

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 June 2020 publication will include data up to the end of April 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.

Data revision policy

Data within this release have been revised in accordance with the National Accounts Revisions Policy. Data in this release have been revised back to January 2020 when compared with trade figures published in our previous trade bulletin on 9 April 2020. Data in this release are consistent with the GDP first quarterly estimate for Quarter 1 (Jan to Mar) 2020 also published on 13 May 2020.

Erratic commodities

Trade statistics for any one month can be erratic. For that reason, we recommend comparing the latest three months with the preceding three months and the same three months of the previous year.

Oil and other "erratic" commodities can make a large contribution to trade in goods, but they often mask the underlying trend in the export or import values because of their volatility. The "erratics" series includes ships, aircraft, precious stones, silver and non-monetary gold.

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. This means that we do not receive export and import data separately, just the balance (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.

HM Revenue and Customs (HMRC) data are used in our processing to publish an EU and non-EU allocation of precious metals. Data from HMRC are based on a cross-border movement of goods basis, whereas we publish on a change of economic ownership basis. This may lead to differences in the country-level estimates. These estimates are the best country-level breakdowns at this time, but users are advised to apply caution and take account of the separate methods basis of these outputs.

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

The base year

Because of a very demanding set of changes in the 2019 national accounts annual update, we have not fully reconciled 2017 annual data. Instead, we have produced an indicative balance to allow further time for final quality assurance of the data. Consequently, the reference year and last base year for all chained volume measure (CVM) series remains as 2016.

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 HMRC being the largest for trade in goods.

This monthly release contains tables showing the total value of trade in goods together with CVMs and implied deflators (IDEFs). Figures are analysed by broad commodity group (CPs, CVMs and IDEFs) and according to geographic area (CPs only). In addition, the UK trade statistical bulletin also includes early monthly estimates of the value of trade in services.

Further qualitative data and information can be found in the accompanying datasets. This includes data on response rates and revision triangles.

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.

Bulletin changes

In recent releases, we have brought in some changes to the bulletin, aimed to improve its user-friendliness. This includes the addition of new sections on “Strengths and limitations” and “Measuring the data” as well as a “Glossary”. Please email us at trade@ons.gov.uk if you have any feedback about the new design.

National Statistics designation status

The UK Statistics Authority suspended the National Statistics designation of UK trade 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.