–Feb global goods deficit Stg6.179bn vs Stg8.066bn in Jan
–Feb global goods/services deficit Stg2.061bn vs Stg3.904bn in Jan
–Feb global goods deficit ex oil/erratics Stg6.17bn vs Stg7.516bn Jan
–Feb global goods deficit median forecast Stg7.4bn; total Stg3.2bn

LONDON (MNI) — The UK’s goods trade deficit with the world
narrowed to its lowest level for nearly four years in February as
exports bounced back sharply, according to figures released by National
Statistics Tuesday.

The goods trade deficit narrowed to Stg6.179 billion in February
from Stg8.055 billion in January, below the median forecast of a
fall to Stg7.4 billion.

While much of the narrowing this month would appear to be a
bounceback from a weather related widening in January, the shortfall is
now at its lowest since June 2006, suggesting that the fall in Sterling
over the past few years may be starting to help exporters.

The value of exports leapt 9.5% on the month in February, following
a 6.6% fall in January, the largest monthly increase since January 2003.
Imports were down 0.1% on the month.

In volume terms exports rose 8.3% on the month, the largest
increase since March 2006 while import volumes fell 0.5%.

These latest figures tie in with recent data from the manufacturing
sector which has shown an improvement in recent months. In particular
the CIPS Purchasing Managers’ Index hit a 15-year high of 57.2 in March
with the export index rising sharply.

Bank of England Deputy Governor Charles Bean said recently that he
expected to see the UK’s trade deficit decline eventually given the drop
in the value of sterling.

“What we will see in due course, is an effect on both the share of
exports in world trade and also on imports from the substantial
depreciation of sterling, which is down about a quarter from its
pre-crisis levels,” he said.

Trade deficits with both EU and non-EU countries narrowed sharply
in February. The EU deficit declined to Stg2.85 billion from Stg3.4
billion in the previous month. The value of exports to EU countries rose
5.1% on the month while imports were unchanged.

The non-EU deficit narrowed to Stg3.329 billion in February from
Stg4.665 in January, as exports surged 15.1% while imports fell 0.3%.

Excluding oil and erratic items the goods trade shortfall narrowed
to Stg6.17 billion from Stg7.516 billion.

Including services, the total trade deficit declined to Stg2.061
billion from Stg3.904 billion, below the median forecast of Stg3.2
billion.

–London newsroom: 020 7862 7492; email: drobinson@marketnews.com

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