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UK equipment exports, imports continue upwards trend

UK equipment exports, imports continue upwards trend

LONDON: UK exports of construction and earthmoving equipment continued its upward trend in Q2 of 2017, showing growth for the fourth consecutive quarter. Overall, Q2 2017 levels were the highest for two years, since Q2 2015, according to the latest quarterly report from the UK’s CEA – Construction Equipment Association. Exports in Q2 2017, increased by 5.3% in weight terms (tonnage of machines) compared with Q1 2017 and 2% in monetary terms, reaching nearly €777 million (£714 million). In the first half of 2017, exports were 19.1% higher than the same period in 2016 on a value basis at almost €1,537 million (£1,413 million). On a weight basis, exports in the first half of the year are also 11% ahead of 2016 levels. The increasing levels of exports of equipment can be attributed to both improving demand in many of the major overseas markets, as well as the benefit of the weaker UK sterling exchange rate since the middle of 2016, following the Brexit referendum – Britain to leave the European Union. The US remained top destination for UK exports in the first half of 2017, accounting for 19% of total exports on a weight basis and 23% by monetary value. Exports to all the European Union’ 28 member countries accounted for 48% of total weight of machines exported in the first half of the year and 44% of monetary value. These were similar proportions to the 2016 annual levels.

Imports of equipment also showed further increases in Q2. They are following the same seasonal pattern as in the past two years – peaking in Q2 and bottoming in Q4 (see graphs). In Q2, imports showed a 4.3% increase on Q1 2017 in weight terms and a 2.6% increase by monetary value, reaching nearly €433 million (£398 million). Imports were also at their highest level since Q2 2015 on both a weight and value basis. In the first half of 2017, imports were 15.8% higher than the same period in 2016 on a monetary value basis at €855 million (£786 million). On a weight basis, imports were also 3.4% ahead of 2016 levels in the first half of the year.

Higher levels of imports of equipment in the first half of the year are consistent with statistics on sales of equipment in the UK, according to the UK construction equipment data exchange, operated by data processing company Systematics International. This shows an increase of 6% in equipment sales in the first half of the year compared with the same period 2016. Japan remains the highest single country source of imports in 2017, accounting for 19% of total imports of equipment in the first half of the year on a value basis. Imports from Sweden also remain strong this year, accounting for 17% of total equipment imports – Sweden rises from 5th in the 2016 to second place so far this year. The UK remains a net exporter of construction and earthmoving equipment, measured in both weight and value terms. In Q2, the trade surplus increased slightly on Q1 levels to £316 million. This was lower than the surplus of nearly €370 million (£340 million) in Q4 2016, but after this, was the highest quarterly surplus since Q4 2015.