Commenting on the trade statistics for March 2018, released today by the ONS, Suren Thiru, Head of Economics at the British Chambers of Commerce (BCC), said:
“The narrowing in the UK’s trade deficit in the quarter is a welcome improvement from the weaker performance in the previous quarter, and mainly reflects a fall in goods imports from non-EU countries. However, short term trade data is often subject to significant revisions and should be treated with caution.
“Despite the narrowing in the UK’s trade deficit in the first quarter, with the construction sector in recession and manufacturing output slowing, this is further confirmation that the UK’s economic performance in the opening months of 2018 has been underwhelming.
“While export activity remains strong amid improving global trading conditions, the UK’s net trade position is likely to remain under pressure from strong import growth, with little sign that businesses or consumers are switching away from imports towards domestic alternatives, despite their higher cost.
“As a consequence, the lack of import substitution is likely to limit trade’s contribution to UK economic growth over the near term and means that a sustained rebalancing of the UK economy remains a long way off.
“More needs to be done to help firms compete on the global stage by addressing the longstanding issues, from the UK’s skills gap to our creaking digital and physical infrastructure, that continue to undermine the UK’s trade potential.”