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Economy in Brief

UK Trade Picture: Better In Month But In Flux
by Robert Brusca July 9, 2009

The UK trade balance shrank to 6.26bln sterling in May from 7.14bln in April. Exports edged lower, while imports fell by 4% in May. Export and import trends do not show very dramatic signs of change. Exports are declining by a bit less than imports and their rate of decline is more persistently losing that negative edge, but that remains a very gradual process. For imports the declines over various horizons are still large. The pace of decline over three months is less than for six months; the drop over six months shows acceleration in the drop compared to 12 months. Import trends are still a chaotic.

Exports and imports of road vehicles have picked up, perhaps in response to various vehicle purchase plans in effect in the UK and around Europe. Vehicle sales have picked up because of such incentives.

Trends for capital goods shipments are worsening for exports and for imports over 12- 6- and 3-months.

For other groups of exports and imports the patterns are still too varying to categorize.

German trade reported a bounce in exports with imports still falling in May. German orders (especially foreign orders) and industrial output have been on the mend in other recent reports. Still, it is too soon to throw the UK figures in with that lot and call them positive. The UK trade accounts still have divergent trends and the improvement in trade has given way to deterioration and then to more improvement. It is too much in flux to be sure of. Both export and import trends are still under clear downward pressure Yr/Yr. There is no solid sign of trade flows returning to an expansion path any time soon for the UK.

UK Trade trends for goods
  m/m% % Saar
  May-09 Apr-09 3M 6M 12M
Balance* - £ £6.26 - £ £ 7.14 - £ £6.62 - £ £ 6.89 - £ £ 7.34
Exports          
All Exp -0.8% -1.5% -12.3% -13.7% -14.1%
Capital gds -2.8% -8.0% -34.3% -28.1% -16.1%
Road Vehicles 14.5% -8.3% -10.6% -39.8% -35.0%
Basic Materials -22.2% 11.6% -33.3% -3.6% -44.4%
Food Feed Bev & Tbco -0.6% 4.2% 11.9% 17.5% 9.2%
IMPORTS          
All IMP -4.0% 1.5% -16.1% -20.1% -15.3%
Capital gds -7.5% -0.7% -42.6% -37.1% -19.9%
Road Vehicles 5.5% -5.6% -9.4% -22.5% -38.4%
Basic Materials -2.0% -2.0% -16.5% -39.8% -36.2%
Food Feed Bev & Tbco -2.1% 5.5% 8.2% 5.7% 9.3%
*Stg Blns; mo or period average
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