UK Trade Statistics March 2021
As business understanding of the new UK-EU relationship grows day by day, trade statistics for March 2021 and the first quarter of the year demonstrate the impact that EU Exit has had on UK imports and exports so far.
Trade with the EU has continued its recovery from the historic lows of January, with imports and exports seeing monthly growth in March, but statistics for Q1 2021 show a substantial fall in both EU imports (-21.7%) and exports (-18.1%) when compared to the final quarter of 2020. On the other hand, trade with non-EU markets has remained relatively stable. The contrasting picture between EU and non-EU markets suggests that the end of the transition period, the implementation of the EU-UK Trade and Cooperation Agreement, and the new challenges that it presents to business, has had a damaging effect on UK trade.
Stockpiling in the latter stages of last year will have buoyed the 2020 Quarter 4 statistics somewhat, but these statistics, along with the testimony of North East businesses trading with the European Union, illustrate the challenges that EU Exit has presented to the business community nationally and in our region. Internationally trading businesses will be critical to the nation’s COVID recovery, and government will need to continue to support businesses financially and through clear, timely communication of the upcoming changes to the UK-EU relationship, so they can make the most of opportunities in the largest single market in the world.
Total trade for the UK in March 2021 grew by £4.6bn on the previous month, with imports and exports both increasing by 6.5% and 9.3% respectively. The total value of UK exports in March 2021 was £26.7bn, while imports were £37.0bn – the overall trade deficit remained static at £-10.3bn.
Traders in both EU and non-EU markets increased their volumes when compared to February 2021, as EU exports increased by 8.6% due to businesses adjusting to the new UK-EU trading relationship and overcoming new barriers to trade, while non-EU exports also grew by a slightly higher 9.9% or £1.3bn, to total £14.0bn compared to the £12.7bn value of UK exports to the EU.
Quarter 1 in Perspective
With only seven days between the UK-EU trade agreement being announced and its implementation, the first quarter of 2021 was always going to present challenges to traders. UK exports to the EU valued £32.2bn, down by £7.1bn or 18.1% compared to Quarter 4 of 2020, while imports from the EU fell by an even greater £14.0bn or 21.7% to a value of £50.6bn.
Non-EU trade had a remarkably less dramatic time in the first quarter of the year, with UK exports to non-EU markets growing by 0.1% compared to Quarter 4 of 2020, and imports falling by 0.9% to £53.2bn. This is the first quarter, since records began in 1997, where UK imports from outside of the EU were of greater value than those from the EU. Imports from outside the EU in Q1 2021 valued £53.2bn while exports valued £41.1bn.
One key driver of non-EU import growth has been an increased demand for clothing, specifically from China. Export growth has been supported, in part, by an improvement in the automotive sector – one of the hardest hit sectors in the last 12 months. As showrooms reopened across the UK and demand for new cars grew, imports and exports of automobiles and related machinery grew with both EU and non-EU markets.