The IoD has urged the Government to take action to ensure the UK's significant drop in goods trade with the EU avoids becoming a permanent fixture.
The Office for National Statistics reported that figures for January showed a 40.7% monthly drop in the export of goods to the EU, along with a 28.8% fall in imports from the bloc as well. Both of these are the largest since records began.
In contrast, there was a fractional 0.2% increase in goods exports to non-EU countries, with an overall monthly 19% drop in overall UK goods exports. Services trade meanwhile took less of a hit, with a 0.9% general decrease in exports eclipsed by a 2.4% drop in the import of services. In total, the UK's exports in January fell 11.8% and imports dropped further by 17.6%.
Commenting for the IoD, senior policy adviser Allie Renison said
“Even taking account the December start to lockdown and stockpiling increase in the months leading up to January and Brexit proper, these figures are horrendous.
"The fact that services trade was far less affected and goods exports to non-EU rose marginally all in the same period reflects the particular impact that disruption from new Brexit changes has had.
The IoD long warned of the potential for a perfect storm of variables collide in giving businesses so little time to adapt to new trading arrangements with the EU. Unfortunately that seems to have come to pass.
The challenge now is for government to take steps in areas it can control to ensure this drop in trade with the EU does not become permanent, and negatively affect the UK's wider export capabilities in the longer term.
While these figures should of course be taken with more than a pinch of salt, considering other variables like Covid disruption and mitigating changes to trade in the run-up to January, recent figures from EU countries showing a similar drop in trade with the UK put the onus on both sides to work together to ensure the impact on trade is a temporary blip rather than a permanent decline.”