–Nov Global Goods Trade Deficit Stg8.644bn vs Stg7.868bn Oct
–Nov Non-EU Goods Trade Deficit Stg5.021bn vs Stg4.556bn Oct
–Nov Total Trade Deficit Stg2.566bn vs Stg1.861bn Oct

LONDON (MNI) – The UK’s goods trade deficit widened in November,
but the current trend suggests a narrowing in Q4, suggesting net exports
may make a positive contribution to growth over the quarter.

Figures from National Statistics showed the global goods trade
deficit widened to Stg8.644 billion in November from a revised Stg7.868
billion shortfall in October, a little wider than the median of Stg8.3
billion.

In spite of the widening this month, Q4 looks set to show a sharp
narrowing barring a severe deterioration in December. If the December
goods and services shortfall remains broadly stable in December then
there will be a narrowing of around Stg3 billion between Q3 and Q4,
which suggest net exports will add positively to GDP in the final
quarter of 2011.

A positive contribution to GDP would be a welcome sign as, in spite
of hopes of a rebalancing of the economy, net exports have knocked
0.7 percentage point off GDP growth in the last two quarters.

Following a massive surge in exports last month it was not
surprising to see some pullback in November with goods exports down 1.5%
on the month. Imports were up 1.1% on the month.

Analysts had forecast an unwinding of October’s mammoth gains in
exports in commodities such as chemicals although it is not clear this
is the reason for the rise in the goods deficit in November.

A key driver of exports last month was chemicals where exports were
up 11% on the month, but there was only a 1% fall this month. There was,
though, a large rise in chemical imports in November, which rose by 12%.

Excluding oil and erratic items, which gives a better guide to the
underlying trade position, the deficit widened by a similar amount, to
Stg7.268 billion from Stg6.605 billion.

Including services the total trade deficit widened to Stg2.566
billion in November from Stg1.861 billion in the previous month,
bang-in-line with the median forecast.

–London newsroom: 44 20 7862 7491; email: drobinson@marketnews.com

[TOPICS: M$BDS$,M$B$$$,MT$$$$,MABDS$]