Newspaper article The Evening Standard (London, England)

UK Manufacturers Bring New Year Cheer as Weak Sterling Gives Exports Shot in the Arm

Newspaper article The Evening Standard (London, England)

UK Manufacturers Bring New Year Cheer as Weak Sterling Gives Exports Shot in the Arm

Article excerpt

Byline: ECONOMIC ANALYSIS Russell Lynch

UK HEADS G7 EXPORT GROWTH (Q4 2015) = 100 CHANCES are you didn't notice but, nestled among the dodgy jumpers and ties under the Christmas tree this year, there was an expensive present to us all from the nation's number-crunchers.

The generous gift -- cumulatively worth around PS16.5 billion since the end of 2015 -- came from the Office for National Statistics' latest take on UK growth. At the stroke of a pen, its revisions significantly boosted the UK's total exports of goods and services; for example, in the latest quarter covered by the figures ( July to September), the ONS now reckons we sold PS141 billion overseas -- some PS4.8 billion more than it thought in November. The bulk of the improvement was accounted for by services exports, which are harder to measure than goods.

The significant tweaks also go a long way to clearing up the mystery of why the export booms showing up in other sources (such as the CBI's industrial trends survey, for instance) weren't being reflected in official data despite the near-20% fall in sterling in the past two years.

But thanks to the ONS's rosier view, the UK has suddenly gone from the middle of the pack to the top of the table among G7 peers on exports, as the graph from Nomura shows. Since the pound's depreciation began in late 2015 ahead of the Brexit referendum, volumes have jumped 7.7%, nearly twice as fast as the much more tepid 4.1% originally estimated by the statisticians.

These changes might seem like ancient history but they're worth flagging up because -- aside from being an obvious fillip for our manufacturers -- it's an indicator of the direction of travel. Although Brexit could be bad news for the economy in the long run, at least we know we're doing better than we thought we were.

Our manufacturers are being eclipsed by their Continental rivals in the growth stakes thanks to the stimulus being poured on by the European Central Bank, but the Chartered Institute for Procurement & Supply's snapshot of UK fortunes still shows our companies in growth for a creditable 17 months running, and outpacing the US to boot. …

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