UK goods trade gaps narrows slightly in March

LONDON Fri May 10, 2013 10:16am BST

Containers are seen in a dockyard at Southampton Docks in southern England April 23, 2013. REUTERS/Eddie Keogh

Containers are seen in a dockyard at Southampton Docks in southern England April 23, 2013.

Credit: Reuters/Eddie Keogh

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LONDON (Reuters) - Britain's goods trade deficit narrowed slightly in March despite a rise in the deficit on trade in oil and other fuels to more normal levels, official data showed on Friday.

The Office for National Statistics said the goods trade deficit shrank to 9.056 billion pounds from 9.165 billion pounds in February, broadly in line with economists' forecasts.

The goods trade deficit with non-EU countries also narrowed, to 3.470 billion pounds from 4.208 billion pounds in February, beating forecasts for a bigger gap of 4.1 billion pounds.

Including Britain's surplus in trade in services, the overall trade deficit decreased to 3.130 billion pounds.

In the first three months of the year, the trade gap stood at 9.067 billion pounds, down from 9.628 billion pounds in the previous quarter.

Although the monthly figures tend to be volatile, the latest data still leaves the possibility that net trade was again a drag on economic growth in the first three months of 2013, when Britain's gross domestic product rose 0.3 percent.

British goods exports rose 5 percent in March from February but fell 1.2 percent in the first three months of the year compared with the previous quarter.

In coming months, British exports may increasingly benefit from a sharp weakening in the pound earlier this year. In March sterling hit a 20-month low against a trade-weighted basket of currencies.

A separate official release showed on Friday that construction output fell 2.4 percent in the first quarter, a modest upward revision of the 2.5 percent plunge the ONS pencilled in its first estimate of GDP. The revision will have no impact on estimates of first-quarter economic growth, the ONS said.

Volume of construction output is now at its lowest level since the last quarter of 1994, it added.

Weak construction activity was the main reason the economy contracted in three quarters last year and it also weighed on GDP early this year.

(Reporting by Olesya Dmitracova and Li-mei Hoang)

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