UK trade figures for February 2017 have shown once again that our trade deficit has widened, largely as a result of an increase in ‘erratic’ goods. However, longer-term measures continue to point to an improvement in the UK’s trade performance.
Trading conditions for UK exporters are likely to improve over the near term as a persistently weaker Sterling, and an improving outlook for the global economy, combine to boost international demand for UK goods and services. However, the extent of the improvement is likely to be limited by the rising cost of raw materials, which together with the raft of other high input costs facing businesses, is putting pressure on their cost bases.
Although trade’s contribution to UK economic growth is set to rise over the next few years, this is unlikely to be sufficient to offset the expected slowdown in other areas of the economy, most notably consumer spending.
As we move through the negotiating process for exiting the EU, there must be a greater focus on providing practical support for those businesses looking to export, including revitalising and expanding the trade mission programme to help firms take full advantage of growth opportunities in new markets.