The Office for National Statistics (ONS) has produced a report showing a noticeable change in UK trade. This is likely to be due to the fall in world trade and disruption to global supply chains as a result of the impacts of the coronavirus pandemic and global recession.
There may also be some impact from Brexit and related uncertainty. However, it should be noted that these are only initial post-transition period estimates; it is too early for any conclusions to be reached about longer-term trends or impacts. We will need to wait for further analysis as the Pandemic unfolds.
Key points highlighted are:
- UK service exports and imports have declined since Quarter 1 (January to March) 2019, with trade with EU countries falling more than trade with non-EU countries.
- The share of total service imports from EU countries fell by around 9% to 37.9% in the two years to Quarter 1 2021. The share of total service exports also fell by around 1.3% to 36.5% over the same period.
- The proportion of businesses citing coronavirus (COVID-19) as a challenge increased in mid-2021 compared to the beginning of 2021. The proportion citing Brexit also fell over the same period. The International Trade in Services Survey also suggests the pandemic had a bigger impact on falling trade in services.
- Service types that are reliant on the movement of people, such as travel were impacted most by the pandemic. Other affected services include transportation, manufacturing, maintenance and repair, and construction.
- Exports of legal, accounting and management services to non-EU countries increased in Quarter 1 2021, compared with Quarter 1 2019. This seems to be driven by trade with the US, while exports to the EU fell over the same period.
- EU imports of financial services fell to 25.3% of world total financial services in Quarter 1 2021 compared with Quarter 1 2019. However, the composition of exports remained stable.