Reacting to the latest ONS Trade data, William Bain, Head of Trade Policy at the BCC, said:
“The picture for global trade in the first quarter of 2023 is creating serious challenges for UK exporters, with a drop off in services as well as goods. While a pick-up in global demand is likely to develop in the second half of the year, we need action now to address both the cyclical and structural factors holding back UK export growth.
“Labour market concerns appeared to act as a brake on any further services growth during March. Removing inflationary effects, UK services exports, which make up the bulk of our overseas sales, are still 0.9% below their pre-pandemic levels. The Government needs to do more to remove non-tariff trade barriers that are frustrating firms and make a big push to improve take up of free trade agreements.”
Detailed Analysis of UK trade Data
Figures for March revealed a further drop in both goods imports and exports, concluding a weak start to the year. Across the quarter, UK goods exports values declined by 3.2%, and goods imports by 7.5%. Services exports values fell by 2% across the quarter. Taking goods and services trade overall, there was a fall in UK exports values of 2.6% between January and March 2023, and in imports of 6.8%.
After taking inflation into account, goods imports values fell by 2.1% in March and goods exports by 2.7%. Although imports of goods with the EU remained static, there was a decline in goods imports trade with the rest of the world in March of 4.7% – driven by lower fuel and oil imports, and across cars, transport, machinery and other manufactured goods. Good exports to the rest of the world fell by 3.6% and to the EU by 1.7%. In services, UK exports increased by 0.8% in March, and imports by 0.3%.
Reduced imports across the quarter led to a fall in the overall UK goods and services trade deficit from £15.1bn to £10.2bn in Q1 2023.