Latest Trade and Economic Data Published
12th March, 2021
Exports to the EU were down 40% in January and imports from the EU fell by 28.8% compared with December according to the first official figures by the Office for National Statistics (“ONS”) since the introduction of new trading rules with the European Union.
There is some evidence from the ONS that this had picked up by the end of the month but it is too early to tell.
Liz Martins, UK economist for HSBC and a regular presenter at Chester BID’s Professionals In Partnership events hosted by Aaron and Partners, was speaking about this on Radio 4 this morning.
She said that it was very hard to tell what we were going to get in these official numbers because what we’ve been told was the companies have done a lot of stockpiling prior to the end of the year and the new regulations coming in so, therefore, they didn’t do a lot of trade with the EU at the beginning of the year. However, she still thinks these numbers are quite dramatic.
There has been a slew of data out this morning with the GDP figures for January. Liz explained the consensus of economists thought we were looking at a 5% fall so the fact the UK economy shrunk by 3% last month is a smaller fall than expected especially given that it was during a lockdown. By way of comparison, in April 2020 the level of activity was 24% lower than pre-pandemic. In January, with a similar level of closures and restrictions, it was just 9% lower than before Covid so the economy becomes much more resilient and companies have learnt to do things remotely and smart ways around the restrictions. Accordingly, the fall has been smaller than expected.
Construction was the only sector of the economy that didn’t shrink in January and, unsurprisingly, services such as hospitality were most affected. Liz thought the construction sector isn’t necessarily affected by the restrictions as sites weren’t closed, they can be run in line with the regulations and much work is outdoors but, even so, for that sector to rise is impressive. However, there were big falls in manufacturing which probably also related to Brexit and in-services with the current closure of shops and restaurants.
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