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The Changing Shape of Trade and Investment in the UKPaula Maratos BIS Michael Hardie ONS 24th September 2013 #StatsTradeEvent1

Testing the technology#StatsTradeEvent2

Voting pads

Menu/Power-press and hold to power remote on/offEnter / Send- press to submit commandsDirectional Arrows-press to navigate between answer choices#StatsTradeEvent3

To which sector do you belong?Central GovernmentLocal GovernmentIndustryResearchAcademiaOther

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Content TradeGlobal positionUK positionKey partnersKey sectorsForeign Direct Investment (FDI)Global positionUK positionKey partnersKey sectorsRecent trends and challenges#StatsTradeEvent5

Trade#StatsTradeEvent6

Source: UNCTAD and WTONote: Goods exports volumes only. Real GDP has the impact of price changes removed. Global Trade#StatsTradeEvent7

In 2012, what position did the UK rank in terms of value of global exports?2nd6th10th15th

Source: UNCTAD#StatsTradeEvent8

Global trendsSource: UN; Value of Goods and Services exports#StatsTradeEvent

10Source: ONS Nominal GDP and Trade data; Value of Goods and Services imports and export; UNCTAD Population Importance of trade to UK economyUK trade value 1tr

7,800 exports & 8,400 imports per person#StatsTradeEvent

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2012

20121955

Source: ONS Balance of Payments quarterly datasetUK runs a deficit on goods trade but a surplus on services#StatsTradeEvent11

In 2012, which country did the UK export the highest value of goods and services to?

FranceUSAGermanyChinaNetherlands

Source: UN; Value of Goods and Services exports#StatsTradeEvent12

Key partners Export destinations, 2012Source: ONS; Value of Goods and Services exports

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Key partners - trendsSource: ONS Balance of payments; Values goods and services#StatsTradeEvent

Exports=imports14

In 2012, roughly what percentage of exports were in services?20%40%60%80%Source: ONS Balance of Payments#StatsTradeEvent15

Foreign Direct Investment#StatsTradeEvent16

Global trends FDI stocksSource: UNCTAD, 1980-2012#StatsTradeEvent

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In 2012, what position did the UK rank in terms of the value of global FDI inflows?

2nd 4th6th 8th Source: UNCTAD#StatsTradeEvent18

Importance of investment to UK economy

Source: ONS Balance of Payments and National Accounts #StatsTradeEvent

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In 2011, who was the UKs biggest inward investor in terms of FDI?FranceUSAGermanyIrelandNetherlandsSource: ONS Balance of Payments #StatsTradeEvent20

Key Partners Origin Country for UK inward FDI stockSource: ONS Balance of Payments, Values20112002

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In 2011, which broad industry group accounted for the largest share of the UKs inward investment stock?ProductionDistributionServicesSource: ONS Balance of Payments #StatsTradeEvent22

Key sectors UK inward investment stock by industrySource: ONS Balance of Payments 2011

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Recent trends and challenges#StatsTradeEvent24Changes in an exchange rate can have a powerful impact on a countrys trade balance and therefore its economic performance When the market value of the pound falls against other currenciesDepreciation $Trade Balance25The effect of the depreciation:Date/$UK (10)Export priceQ3 20071.0/$2.0210$20.20Q1 20091.0/$1.4410$14.40Date/$UK (10)Import priceQ3 20071.0/$2.024.90$10Q1 20091.0/$1.446.94$1026Index, Jan 2005=100Sterling effective exchange rate and balance of UK trade billionSource: ONS, BOE27Sterling effective exchange rate and UK import and export values, current prices, seasonally adjusted billionIndex, Jan 2005=100Source: ONS, BOE28Potential explanations for UK trade performance since 2007Import penetrationGrowth in key export marketsCompetitivenessRole of oil InnovationProduct qualityInelasticity of exports/importsLow export supply capacityFinancial ServicesIndex, 2010=100The volume of UK services exports, seasonally adjustedSource: ONSUK trade in oil, current prices, seasonally adjustedSource: ONSImports as a proportion of total gross final expenditure, current price, seasonally adjustedProportionsSource: ONSQuarterly import penetration against the relative import price, chain volume measureNon seasonally adjusted, 1998=100Source: ONSIndex, Initial sterling depreciation=100GDP growth in selected major trading partners relative to initial sterling depreciationSource: ONS, OECDAnnual Producer Prices Inflation rates for the G7 economiesSource: IMF%Why its important to improve Trade Statistics

Conclusions#StatsTradeEvent37

#StatsTradeEventTrade and investment are vital to the UK economy and the shape of this activity is changing Countries that trade with the UK has changed, as has the type of trade undertakenOfficial trade and investment statistics tell us about the current position and changes overtimeHowever, as business behaviour and activity change so must the statistics produced to ensure they remain relevantEngaging with users to inform developments is vital

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