Reacting to the ONS Trade figures for October, William Bain, Head of Trade Policy at the BCC, said: “There was a cloudy trade picture in October as goods exports fell again - well short of forecast 2022 growth.
“The ONS Trade data shows a 4.7% fall in the value of goods exports, although services held up better. Overall, though, export performance continued to undershoot the OBR’s 7.3% forecast growth for this year.
“After removing inflationary effects, imports rose, particularly from the EU. As fuel market volatility continued, gas and other fuel imports from the rest of the world were down in October.
“But with data for 10 of the 12 months of 2022 now in, it’s clear that the scale of growth in exports predicted last October is not happening.
“Nevertheless, over the 3 months until the end of this October, exports in both goods and services held up. Energy market fluctuations had an impact on trade data over this period.
“With tougher economic conditions most likely ahead, next year will need a step change in efforts by business and government to develop the Export Strategy to sustain trade volumes.”
Detailed analysis of data:
Goods Imports
In October 2022, UK goods imports rose by 2.3% after removing effects of inflation (values were 2.6% less before this removal).
Chemicals imports from the EU were the principal driver of the 8.3% rise in EU goods imports values in October.
Goods Exports
Falling gas prices were the main factor in the fall in non-EU goods export values in October 2022, by 11.6% from their September 2022 peak. Goods exports values fell by 4.7% in October 2022 after removing inflationary effects - 2.2% fall before removing inflationary effects.
Falls in EU goods exports values were driven by lower sales of fuels but machinery and transport equipment rose slightly. The decrease in non-EU goods export values was largely down to falls in the material manufactures sector, with chemicals, machinery and transport equipment also slightly lower. Sales of oil to China rose.
Services
On services, excluding inflation, imports fell to £16.6bn in October and exports to £27.5bn.
Three-month trend
Looking at the three months to the end of October, total UK goods imports rose by 0.6%, compared with the three months to end of July. Over the same timescale goods exports fell by 0.6%. The services picture was better with a rise of 2.4% in exports over that period accompanied by a 1.4% rise in imports.
Total trade values over that period increased by 0.9% in exports and 0.8% in imports.
Trade Deficit
Excluding inflationary factors, the total trade deficit narrowed by £5.1bn in the three months until the end of October.
And how is it the picture for Greater Manchester?
Whilst regional stats are not available yet from HMRC for Q3, according to our own export documentation data, we have observed that, whilst export consignment values for goods were higher in Q3, this financial year compared with 2021/22, these remain significantly lower than those pre-pandemic (c.29%).
Source: GM Chamber
Also our latest Quarterly Economic Survey (Q3) results show that when asked about 'International Demand' and whether sales and export orders had increased, remained the same or decreased, businesses reported decreases. This week, we will be unveiling the results of our last QES (Q4), but preliminary data suggest the downward trend for exports continued during this period.
Susana Córdoba, Head of International Trade at GM Chamber said: "Both UK and Global economic landscape continue to prove difficult and the next few months will be challenging for many businesses, especially SMEs. To really deliver on the ambitions of the UK Government to triple exports, it is imperative to have stronger private and public sector partnerships, where we are jointly innovating the way we are supporting businesses to become global players. As William Baine, Head of trade Policy, said above, a 'step change' is needed if we are to be truly a Global Britain."
More detail on the ONS data can be found here.
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