Trade gap in goods has narrowed

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BRITAIN’S goods trade deficit narrowed slightly in March despite a rise in the deficit on trade in oil and other fuels to more normal levels, official data showed yesterday.

The Office for National Statistics said the goods trade deficit shrank to £9.056bn from £9.165bn in February, broadly in line with economists’ forecasts.

The goods trade deficit with non-EU countries also narrowed, to £3.470bn from £4.208bn in February, beating forecasts for a bigger gap of £4.1bn.

Including Britain’s surplus in trade in services, the overall trade deficit decreased to £3.130bn.

In the first three months of the year, the trade gap stood at £9.067bn, down from £9.628bn in the previous quarter.

Although the monthly figures tend to be volatile, the latest data still leaves the possibility that net trade was again a drag on economic growth in the first three months of 2013, when Britain’s gross domestic product rose 0.3 per cent. British goods exports rose five per cent in March from February but fell 1.2 per cent in the first three months of the year compared with the previous quarter. In coming months, British exports may increasingly benefit from a sharp weakening in the pound earlier this year. In March sterling hit a 20-month low against a trade-weighted basket of currencies.

A separate official release showed yesterday that construction output fell 2.4 per cent in the first quarter, a modest upward revision of the 2.5 per cent plunge the ONS pencilled in its first estimate of GDP. The revision will have no impact on estimates of first-quarter economic growth, the ONS said.