The United Kingdom is currently struggling to avoid a debt meltdown. According to Citigroup strategist Mark Schofield, the U.K.’s overall deficit is 12% of gross domestic product (GDP). That percentage is twice the average 6% of GDP for all European nations.
International trade statistics for the U.K. in 2009 provide insights on which sectors of Britain’s economy are winning or losing in the global business market.
United Kingdom and the Global Economy
Last year, the value of U.K. exports to the world declined by 24.7% to an estimated US$351.3 billion from $466.3 billion in 2008. Over that same period, United Kingdom imported $473.6 billion worth of products from the rest of world, down 26% from $639.3 billion in 2008.
The U.K.’s global trade deficit was $122.3 billion for 2009. That figure represents a 29.3% reduction from the $173 billion in negative cash flow from the prior year.
But a smaller trade deficit is hardly good news. Exports provide revenues, and the U.K. had $115 billion less in cash flow to pay towards its debt after its dismal international business performance in 2009.
UK Trade with USA in 2009
According to the latest US Census Bureau statistics, the value of UK exports to the U.S. fell 18.9% to $47.5 billion from $58.6 billion last year.
The United Kingdom imported $45.7 billion worth of American goods in 2009. That is a 14.7% drop from $53.6 billion in the prior year.
The U.K.’s trade surplus with America was $1.77 billion for 2009, down by 64.5% from $5 billion in 2008. Britain garnered both a smaller trade balance with its U.S. trading partner principally the result of the abrupt 18.9% loss of export revenue.
Below is an analysis of the bestselling exports and imports that UK and American trading partners exchanged during the year.
Most Popular UK Exports
Among the 10 leading exports from United Kingdom to America, 7 product categories suffered double-digit slowdowns in sales from 2008. Those 7 setbacks in product sales amount to a loss of $5 billion in export revenue, an amount roughly equivalent to 8% of all U.K. exports one year earlier.
- Pharmaceutical preparations … US$11.8 billion, up 7.2% from 2008 (24.9% of exports)
- Other petroleum products… $3.3 billion, down 30.7% (6.9%)
- Crude oil … $2.4 billion, down 5.8% (5.1%)
- Passenger cars … $2.3 billion, down 42.1% (4.8%)
- Civilian aircraft engines … $2 billion, down 4% (4.2%)
- Nuclear Fuel Materials … $1.2 billion, down 10.1% (2.6%)
- Alcoholic beverages other than wine … $1.1 billion, down 13.6% (2.4%)
- Artwork, antiques and other collectibles … $1.09 billion, down 38.6% (2.3%)
- Civilian aircraft parts … $1.04 billion, down 28.4% (2.2%)
- Industrial engines and generators … $983.3 million, down 30% (2.17%).
Fastest-Growing Exports from United Kingdom
Out of 140 product categories, less than 25 showed any gain in U.K. export sales in 2009. Below are 10 of the fastest-growing U.K. exports shipped to the U.S.
- Zinc … US$1.2 million, up 243.1% from 2008
- Non-military spacecraft and parts … $3.4 million, up 226.5%
- Pulpwood … $5.6 million, up 198.1%
- Jewelry … $267.4 million, up 143.4%
- Soft beverages and processed coffee … $118.8 million, up 104.7%
- Blank audio and visual media … $1.7 million, up 104.7%
- Numismatic coins (collectibles) … $73.2 million, up 83.3%
- Fish and shellfish … $132.8 million, up 59.9%
- Sporting and camping gear … $13.4 million, up 33.9%
- Other commercial vessels ... $12.7 million, up 32.6%.
Top UK Imports from US
Only 2 of United Kingdom’s top 10 imports from the U.S. showed percentage gains in 2009.
- Non-monetary gold … US$6.9 billion, up 30.8% from 2008 (15.2% of imports)
- Complete civilian aircraft and parts … $5.4 billion, down 10.4% (11.8%)
- Pharmaceutical preparations … $4.4 billion, up 7.7% (9.5%)
- Artwork, antiques and other collectibles… $1.8 billion, down 29.9% (3.9%)
- Medicinal equipment … $1.2 billion, down 11.3% (2.5%)
- Telecommunications equipment … $1.1 billion, down 21.6% (2.5%)
- Industrial engines … $891.7 million, down 12.1% (2%)
- Electric apparatus … $883.5 million, down 16% (1.94%)
- Computer accessories … $849.7 million, down 23.8% (1.9%)
- Other industrial machines … $746.9 million, down 19.5% (1.6%).
Fastest-Growing UK Imports from America
Among the 10 leading growth imports into United Kingdom last year, 6 product categories below had triple-digit percentage gains.
- Natural gas liquids … US$29.7 million, up 664% from 2008
- Fuel oil … $449.4 million, up 212.6%
- Nuclear fuel materials … $679.1 million, up 184.5%
- Other commercial vessels… $31.2 million, up 166.6%
- Audio and visual media … $10.2 million, up 119.1%
- Railway transportation equipment … $67.2 million, up 101%
- Military trucks and armored vehicles … $273.3 million, up 46.1%
- Artillery, guns, missiles and tanks … $394.1 million, up 46%
- Non-monetary gold … $6.9 billion, up 30.8%
- Aircraft launching gear… $88 million, up 23.8%.
UK Competitive Trade Advantages and Disadvantages
During 2009, the United Kingdom exported $11.8 billion worth of pharmaceutical preparations to the U.S. while spending $4.4 billion on comparable American pharmaceuticals.
The $7.4 billion in trade surplus shows that the UK has a competitive advantage in the trade of pharmaceutical preparations with the U.S. This includes smoking cessation exports like nicotine replacement products.
On the flip side of the coin, the U.S. sold $6.9 billion worth of non-monetary gold to the U.K. during 2009, and bought only $95.5 million worth of the shiny precious metal from British exporters. Thus, America had a clear $6.8-billion competitive advantage in trading gold with United Kingdom.
Sources:This analysis is based on latest statistics from the US Census Bureau - Foreign Trade Statistics and CIA World Factbook as of the date of article publication.
Daniel Workman - A senior business and finance writer who also does French translations, notably international trade and insurance materials.
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