Trade gap narrows as exports rise

The UK's trade gap narrowed in November, helped by a 7.5% rise in exports outside the European Union.

According to the Office for National Statistics, the difference between what the UK exported and imported was £3.1bn ($5.8bn), down from October's £3.6bn. Overall UK exports - including both goods and services - rose by more than 3.2% to £24.8bn, although total imports rose again to a new record of £27.9bn. The deficit for goods alone was £4.6bn, down from October's £5bn. During November the UK exported £16.9bn worth of goods, but imported £21.5bn. The cumulative deficit for the first eleven months of 2004 now stands at £36.3bn, £4.5bn higher than the same period in 2003.

November saw an improvement in export levels to both the European Union and the rest of the world, the Office for National Statistics (ONS) said. EU exports rose 2%, fuelled by an increase in sales of chemicals. Non-EU exports shot up 7.5%, with growth seen across a range of manufacturing sectors including cars, consumer durables and chemicals. The export boost offset a 1% rise in imports. Non-EU imports rose 3%, but the growth in goods entering the UK from the EU slowed to 0.5%.

The UK's deficit with the EU fell to £1.9bn from £2.1bn, while its non-EU shortfall dropped to £2.7bn from £2.9bn in October.

The country's surplus on trade-in-services remained steady at £1.5bn for the fifth month in a row. Paul Dales, UK economist for Capital Economics, said the figures represented an improvement on recent months. However, he stressed that the long-term prognosis for exports was still uncertain. "The figures are a lot better than expected but the trend still remains poor," he said. "There have been some very encouraging signs that the UK export recovery is starting to take hold. But there is a danger that this could be held back by the ongoing weakness of domestic demand on the continent."
