Page 32 - Industrial Technology EXTRA - Brexit Briefing

GDP QUARTERLY NATIONAL ACCOUNTS

Mining and quarrying output fell by 0.4% in
FIG 5. THE UK POSTED A TRADE SURPLUS OF 0.2% IN Q3
the third quarter of 2020, a downward
revision from the first estimate of a 1.3%
increase. Output of electricity, gas, steam
and air conditioning grew by 7.7% in Q3
2020, a downward revision from the previous
estimate of an 8.1% increase. Water supply
and sewerage output grew by 5.1% in the
third quarter, an upward revision from the first
estimate of a 4.8% increase.

Net trade
There were large falls in gross trade flows in
the second quarter, reflecting contractions in
global demand as well as disruptions to
supply chains. These trade flows have
recovered somewhat in the third quarter.

Today’s figures show that the UK posted a estimates with actual data. Imports fell by also an increase in the import of
trade surplus of 0.2% of nominal GDP in the more than exports in the second quarter, in miscellaneous manufactures, reflecting an
third quarter of 2020 (Figure 5), a downward part reflecting the relatively large contraction increase in imports of clothing.
revision from the first estimate of a trade in UK GDP. Some of this has recovered in the
surplus of 0.9% of nominal GDP. However, it latest quarter, as the UK economy External survey evidence points towards a
should be noted that this figure is inclusive experienced a relatively large pickup in recovery in export orders towards the end of
of precious metals – including volatile demand. The narrowing of the trade surplus the third quarter. The September IHS Markit
movements of non-monetary gold. When in the third quarter was mainly driven by UK Manufacturing PMI stated that “the
these are excluded, the UK posted a trade movements in trade in goods, with goods ongoing reopening of many economies
surplus of 0.3% of nominal GDP in the third exports falling by 2.3% and goods imports around the world from lockdowns and
quarter, revised from the previous estimate. increasing by 19.9%. changes to Covid-19 restrictions boosted the
export performance of the UK manufacturing
The revision to the trade balance in the latest The large increase in goods imports was sector in September”.
quarter was largely driven by trade in goods. driven by increases in machinery and
This is because the uncertainty from the transport equipment, particularly cars. This However, the September CBI Industrial
coronavirus pandemic has meant that the is likely because of the reopening of some Trends Survey noted that despite a slight
imputation method for some of the goods car dealerships as coronavirus restrictions strengthening in export order books from
adjustments has caused larger than usual eased from June onwards and the build-up their August levels, these “continue to be far
revisions when replacing the imputed of demand during this period. There was below their long-run average”.

Fall in private sector activity accelerates

in December, finds CBI Growth Indicator

Private sector activity fell at a faster pace in carried out before the introduction of tier 4 a dreadful year. These figures show that
the three months to December (balance of and other new restrictions announced within private sector activity continues to decline,
-21% from -16% in November). That’s the devolved nations. with the second lockdown in England having
according to the CBI’s monthly Growth a particularly significant impact on our all-
Indicator. Increased restrictions important services sector. But while public
Charlotte Dendy, CBI principal economist, health must come first, businesses will now
The composite measure was based on 595 said: “The economy is having a bad end to be wrestling with the increased restrictions
respondents between 23 November and 14 into the new year. The Government has
December. Within this, consumer services helped by making clear that there will be no
(-59% from -42%) fell at a sharper pace changes to the furlough scheme until at least
which is to be expected given the second Spring next year, while applications for
national lockdown in England fell within the Government-backed loans can also
survey field period, while distribution continue.
volumes were flat (-2% from +10%).
“That said, there is no doubt that a fresh look
Manufacturers (-6% from -6%) and business will be needed in January as to how the
and professional services firms (-21% from Government can support UK businesses,
-21%) reported the same pace of decline as given a renewed tightening in restrictions
last month. Looking ahead, the pace of after an already tough year. All efforts must
decline is expected to remain broadly similar be made to accelerate the roll out of mass
in the three months ahead (-18%), although rapid testing and the vaccine so they can
it should be noted that the survey was start to have a material impact.”

32 WINTER 2021 – INDUSTRIAL TECHNOLOGY EXTRA