Balance of Trade

The UK Balance of Trade, also called net exports, equals total exports minus total imports for goods and services. It is published by ONS, the UK national statistical institute, in the monthly UK trade bulletin, part of the UK National Accounts. Goods split physical products by country and commodity; services cover 12 activity accounts estimated monthly from quarterly surveys. A positive result is a surplus, where exports exceed imports, and a negative result is a deficit, where imports exceed exports.

Each release covers 1 month for goods from customs and administrative data, with services estimated by splitting quarterly totals across 3 months. It is published monthly around 1 month or about 40 days after the reference month ends, at 7:00am on dates announced 12 months ahead.

Headline commentary uses current prices, seasonally adjusted and excluding precious metals, with same-day customs data and output reports. Earlier months are revised for late data, with services revised more than goods and re-split on full quarterly results. European Union (EU) goods comparisons across the January 2021 structural break should be treated with caution.

The balance moves with exports or imports by partner region, product, or volatile gold flows.

• Trade in goods balance: goods exports minus goods imports, the larger, persistently negative part of the headline.
• Trade in services balance: services exports minus services imports, a persistent surplus partly offsetting goods.
• EU and non-EU splits: separate balances for EU and non-EU goods and total trade.
• Precious metals, mainly non-monetary gold: volatile London gold, silver, platinum and palladium flows in headlines.
• Goods commodity groups: 10 SITC product groups, from food and fuels to machinery and chemicals.
• Services accounts: 12 EBOPS service types, including transport, travel, financial and business services.

In January 2021 goods exports excluding precious metals fell £5.3bn (19.3%), led by a £5.6bn (40.7%) fall in exports to the EU. Goods imports fell £8.9bn (21.6%), led by a £6.6bn (28.8%) fall in imports from the EU, the largest monthly falls since January 1997. Non-EU exports rose £0.2bn (1.7%) while non-EU imports fell £2.4bn (12.7%), so the total deficit narrowed £3.7bn to £1.9bn.

The deficit narrowed only because imports fell faster, not from export strength. The 3-month deficit widened £6.7bn to £12.8bn amid transition disruption, stockpiling and lockdown, so short-term comparisons should be treated with caution.

1. Collect goods: record goods movements (IMTS) through HMRC customs declarations and Intrastat for Northern Ireland-EU moves, over 90% of goods value.
2. Convert to Balance of Payments basis: change goods to change-of-ownership basis, adding merchanting resale and globalisation adjustments. Remove processing goods, deduct freight and insurance from imports, and replace precious-metals records with smoothed Bank of England data. Exclude Channel Islands and Isle of Man trade with the rest of the world.
3. Compile services: combine the International Trade in Services survey with passenger travel data and bank and government sources. The survey goes to around 2,400 businesses quarterly and 28,000 annually, and each quarterly total is split across its 3 months.
4. Seasonally adjust: adjust published series with X13-ARIMA-SEATS, with services adjusted at 12 account levels, leaving country-by-commodity detail non-seasonally adjusted.
5. Deflate to real terms: deflate goods to chained volume measures at about 150 product levels using producer and trade prices, with 2023 as base year. The implied deflator equals current prices divided by real terms.
6. Balance: calculate balance as total exports minus total imports in £ million, with surplus when exports exceed imports and deficit otherwise. As an illustration, £55.5bn exports minus £59.5bn imports equal a £4.0bn deficit: goods minus £17.0bn, services plus £13.0bn. With an implied deflator of 1.05, real exports are about £52.9bn in 2023 prices.