The UK continues to run a significant trade deficit, according to figures released by the ONS today.
The overall goods deficit for the month of May increased to £9.2bn, compared to £8.8bn in April. Industry analysts had forecast a goods deficit of £8.85bn, according to a Bloomberg survey of 18 economists.
A rise of 0.6% in exports was offset by a rise of 1.7% in imports, largely due to imports of aircrafts. In the second quarter so far, total imports are up 0.3%, while exports of goods and services are down 0.7%.
Chris Williamson, Markit chief economist, said the figures offered some cause for optimism.
“The 0.6% rise in goods exports in May provided some encouraging news, especially as exports had fallen in six of the past eight months.” Williamson said. “The upturn was also better than might have been expected, given the high number of holiday days taken on the European continent in May.”
Increasing Exports has been identified as a key component for a sustained recovery and to create long term growth for British Manufacturing.
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Despite this upturn, Williamson warns that there remains a wide gulf between optimistic business surveys and official figures.
Surveys from Markit and the British Chambers of Commerce (BCC) released this week indicated that exports measures were consistent with export levels, having grown at a quarterly rate of approximately 4%. Official data so far this quarter signals a 0.5% increase.
Regardless of this disparity, Williamson said that it was unlikely that a buoyant manufacturing sector, which this week recorded a 3.7% increase in annual output, could be sustained without robust support from export sales.
Business secretary Vince Cable will today warn that the greatest challenge to the UK export market is an appreciating currency.
With the pound rising to its highest point since 2008 on a trade weighted index, UK exporters face increasingly stiff competition to gain a share of the global market.