Record exports mark broadening of British economic recovery

The recovery in the British economy that has begun since the beginning of the year is broadening out, economists said on Friday. The latest trade figures produced by the Office for National Statistics (ONS) which showed exports of goods reached a record high of 26.9 billion pounds (41.7 billion U.S. dollars) in June, an increase of 1.3 billion pounds over May. Imports for the same period increased 0.7 billion pounds to 35 billion pounds (54.2 billion U.S. dollars). Exports to countries outside the European Union (EU), traditionally Britain's largest single export market, increased by 1.3 billion pounds to 14.2 billion pounds (22 billion U.S. dollars). Trade to EU countries was relatively unchanged over the same period. Martin Beck, UK economist with Capital Economics in London, told Xinhua, "In terms of exports, if we can continue to see this reorientation of UK trade away from the more slower growing mature economies in Europe towards the BRICS and emerging economies that can only be a good thing for UK exports." He added, "There has been particularly strong growth in exports to non-EU markets, like China, which is a good sign." Dr Howard Archer, chief UK and European economist with IHS Global Insight, said, "In addition to the recent healthier news on the domestic economy, there was very welcome marked improvement on the trade front in June which is encouraging for hopes that growth is not only strengthening but becoming more broadly based." Archer said the total trade deficit narrowed to 1.5 billion pounds in June from 2.4 billion (about 3.7 billion U.S. dollars) pounds in May, as export growth of 3.2 percent month-on-month out-stripped import growth of 0.6 percent. There was a marked drop in oil exports and imports in June, said Archer, but It was notable that exports of manufactured goods excluding oil jumped 6.8 percent month-on-month in June. Archer said this pointed to "stronger foreign demand for UK goods, with overall goods exports to non-EU countries spiking up by 10.4 percent." The share of the British export market to the EU dropped to 47.3 percent, the lowest percentage on record, and Archer noted that the July Purchasing Managers' Index survey reported improved demand from China, Australia, the eurozone, Kenya, Mexico, the Middle East, Nigeria, Russia. However, Beck had a warning note on the British economic recovery. He said, "A more pessimistic view is that the recovery to date has been driven by the consumer, and if that continues it is probably going to suck in imports. So it is not clear that we are going to see further falls in the trade deficit. In fact, it may widen as consumer demand gets going and import growth accelerates." David Kern, chief economist with the industry body British Chambers of Commerce, said, "Britain's exporters are now starting to focus more on trade with countries outside the EU. This is particularly encouraging as these countries are growing at a faster rate and will be the ones that provide the greatest opportunities for UK firms." Kern said that the trade deficit was still too large and that not enough progress was being made in rebalancing the economy towards net exports. "Our recent surveys reveal huge untapped potential among British exporters, especially in the service sector, and unleashing this potential will help to secure a sustainable recovery," said Kern who said strong areas were trade finance, insurance, and promotion. (1 pound = 1.55 U.S. dollars)