12 08 09 - Eurozone woes having major impact on UK exporters - ITEM Club - Ernst & Young - United Kingdom

Eurozone woes having ‘major impact' on UK exporters – ITEM Club

• The unusual pattern of Bank holidays makes it difficult to read the movement of the trade balance between May and June
• But looking through the monthly volatility, it is clear that the Eurozone woes are having a major impact on our exporters
• The short-term outlook for exports remains fragile though we are more optimistic about prospects further out

Nida Ali, economic advisor to the Ernst & Young ITEM Club, comments on today’s trade balance figures:

“These figures are once again affected by the unusual pattern of bank holidays, making it difficult to read the actual movement of the trade balance between May and June. However, based on evidence from survey data, we know that the underlying picture for exports is weak, as demand from both Europe and emerging markets has disappointed.

Mark Gregory, Ernst & Young’s chief economist commented:

“Looking through the monthly volatility, it is clear that the Eurozone woes are having a major impact on our exporters. Export volumes to EU countries fell by 3.7% in the three months to June, in contrast to a fall of 2.4% to non-EU countries.

“In the short-term the outlook for exports remains fragile. However, we are more optimistic about prospects further out, providing that the Eurozone drags itself out of recession.”