Wednesday, 26 September 2018
UK export growth hits lowest level since EU Referendum
A significant slowdown in export growth has seen the UK emerge as the worst performing of the largest five EU economies in the past quarter, according to the latest European Export Index from BDO.
The latest findings, as reported by East Midlands Business Link, show that growth of UK exports fell for the sixth consecutive quarter. The UK’s Export Growth Index plummeted to 95.6 in Q3 2018 from 97.6 the previous quarter and is creeping closer to the point of contraction, below 95.0.
The index now sits at its lowest level since Q2 2016, when the UK voted to leave the EU, and marks a dramatic fall of 15.8 index points since Q1 2017.
The rising price of UK exports is contributing to this sluggish growth. The UK’s Export Inflation Index – which indicates the rate of year-on-year growth in export prices – has risen from 100.1 to 102.7 this quarter.
Uncertainty around Brexit negotiations remains a significant factor in the dampened expectations of UK exporters, and rising prices are causing foreign customers to look elsewhere.
This is typified by increasingly cautious announcements from the UK’s largest export goods industry, car manufacturers. BMW plans to shut its plant for a month after Britain leaves the EU, while Jaguar Land Rover has moved 2,000 employees to a three-day week until Christmas, citing Brexit uncertainty and the sliding sales of diesel-powered cars.
By comparison, European exporters have experienced only a slight cooling in their orders. BDO’s Export Growth Index for the EU fell to 99.7 in the third quarter of this year, down from 99.8 in Q2.