What happened to exports in 2023?

This was primarily driven by a strong year for services exports. Comparing 2023 to 2022, services exports increased by 13.2%, where goods exports declined by 4.4%.

However, this figure is driven by inflation. When measuring total exports in terms of volume, thus removing the impact of inflation, total exports only increased by 0.6%. Goods exports decreased by 4.6% and services exports increased by 5.3%.

Goods exports fell to both EU and non-EU countries by 5.9% and 3.0% respectively. There were some interesting changes with the UK’s key trading partners. For example, UK exports decreased to France (-5.7%), Germany (-0.3%) and the Netherlands (-19.2%). More significantly, exports declined by 27.7% to China, and 28.2% to India. Meanwhile, exports to the US increased by 3.7%, and also notably Australia (11%) and New Zealand (16%), both of which the UK has recently ratified Free Trade Agreements with.

This suggests there is some reorientation happening. The IoD’s own research shows many businesses are still grappling with the UK’s new trading relationship with the EU, and that roughly 12% have stopped exporting due to the challenges. Several larger firms have said they are making up for lost EU trade by targeting new markets, particularly the US and Canada. Meanwhile, the sharp decline in exports to China and India can perhaps be explained by the heightened sense of geopolitical risk looming over international trade.

Turning now to the final quarter of 2023, total exports decreased by 2.6% due to a larger decline in services exports.

Exports to the EU decreased by 1.1% in Q4, largely driven by a fall in chemicals and fuel. However, this was partly offset by an increase in machinery and aircraft to Germany. Exports to non-EU countries increased by 0.3% due to increases in material manufactures and fuels.

Looking at services, exports decreased by 4.4%, primarily due to a decrease in ‘other business services’, including accountancy, law and consultancy, and logistics, advertising, marketing and recruitment. There was, however, a £0.8 billion increase in financial services.

View the full ONS data here.