Chris Williamson comments on latest UK trade data from the ONS
Chris said: “A further marked deterioration in UK export performance, according to official trade data, sits in marked contrast to various buoyant survey data. While the surveys indicate that firms are having great success in winning export sales, which should help boost GDP in the second quarter, the official data suggest that exports are slumping.
“The Office for National Statistics was unable to offer any reason as to why export performance has deteriorated so markedly over the past year; a period in which the global economy has been recovering, which would normally boost overseas sales (especially when coupled with a still-weak pound, relative to prior to the financial crisis). In contrast, anecdotal evidence from the survey responses indicate that manufacturers are benefitting from reviving growth in the euro area, alongside good sales to the US, Japan and Middle East in particular.
“Manufacturers are reporting to the business survey compilers that their exports are in fact booming. The Markit PMI, for example, has shown rising exports to have provided a major boost to UK manufacturing since early last year, a trend which has continued right up to May, according to data released earlier this week. The quarterly British Chambers of Commerce survey has been sending an even more buoyant picture of trade performance. In the first quarter, the survey’s measure of manufacturing export sales rose to the highest in two decades.
“The message from both surveys is that goods exports have been growing at a quarterly rate of approximately 5% in recent months, not contracting at rate of around 3%, as signalled by the official data.
“According to the ONS data, goods exports fell 1.5% in April, despite a 1.3% rise to EU countries. That was after the data were corrected for omissions relating to oil exports. The ONS noted that “while the omissions will be addressed in the next UK Trade release, to be published on 10 July 2014, it is important to remind users that there could be other data revisions at that time that could impact on the overall picture.
“These omissions further strengthen our scepticism of the official trade data. The discrepancy between the official data and the various surveys is unusual, and we hope that the omissions to the official trade data go some way to solve this riddle and rectify a situation where the government’s numbers may be significantly misrepresenting the strength of UK manufacturers’ export performance.”
