Why the latest trade figures make for grim reading

Why the latest trade figures make for grim reading

Head of Consumer Research | ParcelHero

 The latest UK trade figures make grim reading for Britain’s manufacturers and retailers. Boris Johnson’s claim that his deal will leave Britain ‘prosperous and dynamic and contented’ looks increasingly far-fetched, says ParcelHero's Head of Consumer Research David Jinks.

The trade figures for February, released this week, are extremely concerning. The -18.3% YOY collapse in exports highlights the impact Brexit is having on the UK economy. It is encouraging that British exports did struggle upwards 9.9% in February compared to the previous month, January 2021. However, that is setting the bar exceedingly low, given that January’s exports were, by far, the worst ever recorded.

The £3.7bn (46.6%) monthly uptick in exports to the EU in February looks a positive headline figure, but keep in mind they had fallen by an eye-watering £5.6bn in January. There's still a lot of trade to claw back. February’s exports to non-EU countries actually fell by -10.5% compared to the previous month. How non-EU exports could fall by £1.5bn against January’s terrible results beggars belief.

The Government can no longer claim that the latest trade results are due to a temporary, post-Christmas dip or stockpiling, as it did for January’s figures. These numbers are clear proof of the impact of Brexit. Even imports of goods fell by over £64bn compared to February 2020 – a decline of -13.6%. That includes sales of key consumer goods such as clothing, footwear and technology.

Brexiteers claimed that markets such as the US would compensate for the loss of trade with the European Union. This proved not to be the case in February. The latest Government data shows that, of the top four UK exports to the USA, only car sales rose. Pharmaceuticals and medicines slumped -42%, chemicals -4% and power equipment -8%.

When Boris Johnson signed his Brexit deal with the EU on 24 December, he claimed Britain would be "prosperous and dynamic and contented". So far, UK exporters look less prosperous, far from dynamic and increasingly discontented. British businesses continue to wrestle with increased customs tariffs, border delays and rising transport costs.

Our fear is that there could be even worse to come. Let’s not forget that some of the most complex, new EU border regulations have been postponed, unilaterally, by the UK Government. What their impact might be on these already worrying trade figures when they are eventually imposed, only time will tell.

See ParcelHero’s new study on the issues facing EU-UK e-commerce and the escalating Northern Ireland trade crisis here