Exporters cash in on China demand
Sales of goods overseas rose by 9.5pc between January and February, pushing exports to £21.3bn. That was a 13.7pc gain on the same month last year.
Exports to the People's Republic saw the most stellar surge, the Office for National Statistics figures showed, rising by nearly 50pc year-on-year.
The numbers suggest manufacturers are finally beginning to cash in from the 25pc devaluation in sterling, after months of disappointing trade data.
While the EU remains far and away the UK's most important market, consuming 54pc of all exports, the figures suggest manufacturers are beginning to diversify.
Lee Hopley, chief economist of manufacturers' lobby group EEF, said: 'We are seeing the benefits of exchange rate effects and a pick-up in some of our bigger markets.
' Clearly the eurozone economies are still very important for the UK, but we have seen the opening up of emerging markets such as China and also the Middle East. ( Manufacturers) have stepped up and taken advantage of that.'
February's potent increase in exports helped narrow Britain's goods trade deficit to £6.2bn, the lowest reading since June 2006. That was significantly below City expectations of a £7.4bn gap. Imports actually fell on the month, slipping 0.1pc, suggesting some UK-based customers may be favouring locally made products over foreign goods made more costly by the fall in the pound.
The report contrasted with data from the US, where the trade deficit widened by more than expected to £26bn in February from £24bn in January.
An EEF survey released today showed that 80pc of UK manufacturers are trying to extend beyond traditional European markets as local economies struggle to expand.
That trend was borne out by yesterday's ONS figures, which showed that while exports to the eurozone rose 3.1pc between January and February, exports to non-EU countries surged 15.1pc.
While China remains a relatively small market for British manufacturers, it is growing rapidly. At £601m, exports to Chinese customers were the highest on record, and the People's Republic is on course to overtake Italy among Britain's leading overseas markets in the first half of this year.
However, sales in China are still modest compared with the £2.17bn of products imported from there into Britain in February alone.
Wednesday, 14 April, 2010
