UK international trade performance sees uptick in Q2 2016

Imports and Exports | | MIC Customs Solutions |

International trade performance rose in the UK during the second quarter of 2016, although the longer-term prospects are more hazy, according to a new report.

The UK's international trade performance saw an improvement during the second quarter of 2016, according to the latest data from the British Chambers of Commerce.

A surge in the volume of issued trade documentation was seen during the period, with the report's Trade Confidence Index - which measures the volume of trade documentation issued by accredited chambers of commerce - rising by 9.4 per cent compared to Q1 2016 and 4.83 per cent compared to the same period last year.

It means the index figure reached a record high of 126.95 during the quarter, with the balance of manufacturers reporting improved export sales rising to a net positive increase of nine per cent in Q2 - up from eight per cent during the first three months of the year.

However, it was noted that this increase could be due to a combination of short-term factors, including a rush to push through longstanding orders before the referendum on EU membership at the end of June, or a desire to complete these deals ahead of the traditionally slower summer season.

In the longer term, prospects for international sales among UK companies seem less certain. The balance of manufacturers reporting improved export advance orders in Q2 fell from plus eight per cent in Q1 to plus five per cent, while for service firms the drop was from 16 per cent to 13 per cent.

Manufacturers and service companies alike were also shown to be less confident that their profitability will increase over the next 12 months, underlining the ongoing uncertainty about the evolving economic and business position following the vote to leave the European Union.

Dr Adam Marshall, acting director general of the British Chambers of Commerce, said: "We will be keeping a close eye on export trends in the coming quarters to see if exporters are able to take advantage of the post-referendum fall in sterling over the summer and beyond.

"The cheap pound could prove to be a double-edged sword for some companies, though, as any who are also importers will have seen their costs rise significantly."