Rise in UK Exports Helps Shrink Goods Trade Deficit

A rise in UK exports have helped shrink the UK goods trade deficit to its smallest amount in almost a year in June, official figures have shown.

The Office for National Statistics (ONS) said the gap between imports and exports narrowed to £8.1bn in June, down from £8.7bn in May.  The ONS also said construction output grew more in the second quarter of the year than it had first estimated.  The data rounds off a week of positive economic news.

The trade gap in goods with non-EU countries fell sharply from £4bn in May to £2.6bn in June, well below forecasts of a £3.8bn deficit.  UK manufacturers have been urged to trade with countries outside Europe – which have been growing far more quickly in recent years – rather than with those in the eurozone, where growth is much weaker.  However, the UK’s single biggest trading partner remains the eurozone.

Although the UK usually imports more goods from other countries than it exports, it normally makes more from services sold abroad than it imports, and taking this into account the overall trade gap, including both goods and services, was £1.55bn, the lowest since January.

Over the three months to June, export volumes grew by 5.9% almost twice as fast as the growth in imports.  June exports were worth £26.9bn, taking the total for the three months to the end of June to £78.4bn, a record sum.

Separately, the ONS released data on construction output, showing it rose by 1.4% in the three months to the end of June, up from the previous estimate of 0.9%.  Earlier in the week, ONS figures showed that manufacturing output rose in June at the strongest pace since the end of 2010. Other surveys have also pointed to strong growth in the service sector and in retail sales.