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Bottom line: Jerusalem, we have a problem. The trade data for June were unsatisfactory, but what is far worse is that they represent another link in a steadily deteriorating trend. This review will focus on the data for the first half of the year, which present a coherent — and distinctly negative — picture.- The deficit for June, on a seasonally-adjusted basis and after excluding trade in ships, aircraft and diamonds, was $1.45bn, marginally more than in April and May. However, the total deficit for the second quarter of 2014, on this basis, was some $1.1bn higher than the parallel quarter of 2013.
- For the first half of 2014, total imports, not seasonally adjusted, rose by almost $1bn compared to January-June 2013, while total exports rose by less than $500mn, pushing the deficit for H1 2014 to $6.46bn, nearly $500mn higher than that for H1 2013.
- Most categories of imports posted small rises or were stable compared to 2013, whereas most categories of exports saw declines — in same case, quite large ones.
- The only important category of imports to post a significant decline was fuels, the ‘bill’ for which fell by over $700mn in H1 2014, compared to the H1 2013 total of $7.5bn. In other words, production from the Tamar offshore natural gas field has prevented a much sharper rise in the trade deficit.
- The key feature among exports is that although exports of high-technology industries rose by some 2.5% in H1 2014, compared to H1 2013, this was due ENTIRELY to a 14% rise in pharmaceutical exports, while all other high-tech sectors declined.
- Meanwhile, in the unfashionable and unloved low-tech sectors, exports posted a strong rise of almost 10% over the first half of 2013, led by textiles and apparel.
