Extra EU exports rise: Intra fall

Companies have focused their efforts on fast-growing economies in Latin America and Asia, as they attempt to offset the effects of the downturn in the Eurozone, where demand for British-made goods is slowing.

Some 51pc of British exports in the three months to May went to countries outside the EU, marking a 13.2pc rise on the previous year, according to the Office for National Statistics (ONS).

By contrast, exports to countries within the EU fell by 7.2pc, with the eurozone\’s hardest hit countries seeing the biggest fall in demand.

Obviously this is just good economics: export to the people who have the money to pay for what you\’re producing.

But the real joy is twofold.

1) Those spouting the nursery book version of Keynesianism, that export cannot rise in and thus provide a fiscal boost in the current environment are wrong.

2) We can now shout even louder at the federasts who insist that 3 million jobs depend upon trade with the EU. It always was bollocks but now we can point to this as yet more evidence: if you\’re making something that others want to buy it is important to note that \”others\” is a plural, meaning that the EU is not the only possible or potential buyer.

9 thoughts on “Extra EU exports rise: Intra fall”

  1. Yup. The improvement in net exports contributed +1.2% to UK real GDP growth in 2011; without it the GDP figures would look even worse.

    The 12% appreciation of Sterling against the Euro will not be helping UK exports to Europe. And those who insist that UK monetary policy is “impotent” should explain why it’s a good idea to allow the currency to appreciate right now.

  2. 1: who are these strawpeople? With the UK’s major trading partners in recession, exports have suffered; it’s good to see that UK exporters, after a couple of years of terrible performance, have managed to find new markets in growing countries.

    2: to a point. IP exports and exports of high-value machine tools to industrialising countries are one thing, but it’s unlikely a factory that shipped fish fingers or soap to Germany last week will be able to sell them to China next week.

  3. “The 12% appreciation of Sterling against the Euro will not be helping UK exports to Europe.”


    “….UK exporters, after a couple of years of terrible performance”


    If a close to £1=1€ rate didn’t help, got to ask:

    ‘What would then?’

  4. I suppose it would be easy to stop sterling appreciating against the Euro. All we’d have to do is guarantee all the PIGS government debts.

  5. I’ve a couple of queries. 1. What part of Keynsian stuff says that exports can’t rise? Might not be adequate, recessions overseas etc, but are you just inventing things that haven’t been said? Is Keynsian stuff to you like neo-liberalism to murphy ie anything you disagree with?

    2. Do the data actually suggest exports to EU countries have fallen that much? I’m looking on a phone, so it’s hard to read, but looks like data mining to me (oddly exports to the Spain and Italy look to have increased, but Germany Netherlands decrease.) Can someone point me to the page that supports what the telegraph says?

  6. Luke: the Telegraph is comparing March-May 2012 with March-May 2011. Table A3 in the ONS pdf gives the monthly data for the EU as a whole; the Total Exports column does indeed show a 7.2% fall (the numbers are repeated in the EU27 Exports column of table F1).

    The EU country breakdown is in table F3. I checked the numbers for Spain and Italy and they match too.

  7. “I suppose it would be easy to stop sterling appreciating against the Euro.”

    Yes, it is very easy. The Bank of England just sends out a press release saying they’ll print unlimited amounts of Sterling and buy Euros below a given peg. This is what the Swiss central bank did last year, and it has worked fine.

    The intuition here was given by a Professor Ben Bernanke: if the Bank of England could print unlimited amounts of Sterling, buy a foreign currency, and not devalue its own currency, it could buy up everything in the world at no cost. The ultimate free lunch.

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