Latest trade data released today (Friday 11 February) shows total UK exports of goods were up by 3.9% in December 2021 – a statistic that IOE&IT director general Marco Forgione said showed the UK “in recovery from the pandemic”.
According to Office of National Statistics (ONS) figures, the increase of £1.1bn in December was driven entirely by a £1bn (7.4%) increase in exports to EU countries while those to non-EU countries remained flat.
Annual imports and exports in 2021 have increased by 8.4% and 4.9% respectively compared with 2020.
Taking 2021 as a whole, ONS data showed that the combined impact of the pandemic and Great Britain’s exit from the EU’s single market caused a 12% fall in exports between January and December last year compared with 2018.
Trade impact
Total imports of goods increased by £0.6bn (1.4%) in December 2021, because of increasing goods coming from non-EU countries, while imports from EU countries remained at similar levels to November 2021.
The FT reports that trade data showed that imports from non-EU countries had surpassed those from EU economies in 2021 for the first time since records began in 1997.
“It seems safe to say there has been a limited substitution effect in trade in goods, as imports from the EU have been displaced by imports from outside the EU, although that picture is clouded by the rising price of imported fuel,” Forgione said.
“While we are not experiencing the wild swings of the past two years, the trading environment remains challenging and it is more important than ever before that companies get the right training and advice in place to help them trade with confidence.
“The IOE&IT trained 11,000 people in 2021 to enable them to do just that but there is much more that we can do to embed international trade into normal business practice right across the economy.”
Chemicals to Ireland
The rise in UK exports in December was primarily due to a spike in chemical exports to Ireland.
“As Ireland is a global hub for pharmaceutical and medtech, this could be directly linked to Irelands own increase exports of organic chemicals globally,” Forgione noted.
“Ireland hosts 24 out of the top 25 biggest players in the pharma market and these companies were in high production mode throughout 2021 to meet soaring demands for products connected to the Covid 19 pandemic.”
Germany leads
Taking 2021 UK trade as a whole, there was a good recovery compared with the depths of the pandemic in 2020, with goods exports of £14.5bn (4.9%) and imports of £36bn (8.4%). However, the comparison with this week’s German trade data over the same period shows room for further UK improvement.
Pound Sterling Forecast reports that German exports rose last year by 14%, despite supply chain problems, hitting a record €1,375.5bn, taking exports 3.6% above the pre-pandemic levels.
GDP recovery
Figures for UK GDP showed that the UK economy grew by 7.5% last year – faster than expected – following a 9.4% collapse in 2020, reports the BBC.
Figures were down by 0.2% in December due to Omicron restrictions, ONS figures show, says The Guardian, but the annual figure is the best since World War 2.
