UK manufacturing exports fell sharply in the second quarter of this year, according to the Lloyds Bank International Trade Index, which showed the speed of decline was the fastest since data collection began in 1996, driven by the impact of the novel coronavirus on both international supply chains and falling overseas demand for British goods and services.
The index hit a new low of 34.6 for new manufacturing exports between April and June 2020, representing a dramatic decline from 46.8 in the first quarter of this year. The previous historic low of 38.8 was recorded in 2009 amid the global financial crisis. A reading below 50 signals a reduction in new export orders, while a reading above 50 indicates growth.
Of those manufacturers that reported a downturn in overseas orders, the vast majority (93 per cent) attributed it to the impact of coronavirus, blaming the pandemic for shrinking demand, widespread business closures, and delays to export projects.
In June, UK clothing and textiles (50.7) and other manufacturing (56.7) goods (which includes sports and leisure equipment), furniture, and luxury items such as jewellery manufacturing exports grew.
Basic metals (28.3) and automotive (31.5) exports were hit hardest, reflecting a fall in global demand for manufacturing components and the shutdown of car production in Europe.
Exports of chemicals and plastics (41.1), including pharmaceuticals and healthcare products, fell at a slower rate than other manufacturing goods. This was in part due to forward purchasing by overseas buyers in expectation of delivery delays.
The end of the second quarter of 2020 saw early signs of international demand returning with June showing an increase in appetite for British consumer goods.
Sharp economic contraction in the majority of UK export markets, including the European Union and North America was also recorded, driving a trade-weighted measure of global demand for British goods and services to a record low of 35.2 in the second quarter, according to a press release from the company.
China, after posting a reading of 42 in the first quarter, was the only UK export market to see an increase in the second quarter (52.6), as the country’s lockdown measures eased.