Session 2 - Changing shape of trade and investment in the UK
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    Session 2 - Changing shape of trade and investment in the UK Session 2 - Changing shape of trade and investment in the UK Presentation Transcript

    • #StatsTradeEvent
    • The Changing Shape of Trade and Investment in the UK Paula Maratos – BIS Michael Hardie – ONS 24th September 2013 #StatsTradeEvent
    • Testing the technology #StatsTradeEvent
    • Voting pads Menu/Power- press and hold to power remote on/off Enter / Send- press to submit commands Directional Arrows- press to navigate between answer choices #StatsTradeEvent
    • To which sector do you belong? A) Central Government B) Local Government C) Industry D) Research E) Academia F) Other #StatsTradeEvent
    • Content • Trade – Global position – UK position – Key partners – Key sectors • Foreign Direct Investment (FDI) – Global position – UK position – Key partners – Key sectors • Recent trends and challenges #StatsTradeEvent
    • Trade #StatsTradeEvent
    • 0 40 80 120 160 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 Index,2005=100 Year Population 0 40 80 120 160 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 Index,2005=100 Year Population real GDP 0 40 80 120 160 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 Index,2005=100 Year Population Goods exports volumereal GDP Source: UNCTAD and WTO Note: Goods exports volumes only. Real GDP has the impact of price changes removed. Global Trade #StatsTradeEvent
    • In 2012, what position did the UK rank in terms of value of global exports? A) 2nd B) 6th C) 10th D) 15th Source: UNCTAD #StatsTradeEvent
    • Global trends Source: UN; Value of Goods and Services exports #StatsTradeEvent
    • 10 Source: ONS Nominal GDP and Trade data; Value of Goods and Services imports and export; UNCTAD – Population Importance of trade to UK economy £7,800 exports & £8,400 imports per person #StatsTradeEvent 0% 10% 20% 30% 40% 50% 60% 70% 80% 0 200 400 600 800 1000 1200 1400 1600 1955 1958 1961 1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 £bn GDP (LHS) 0% 10% 20% 30% 40% 50% 60% 70% 80% 0 200 400 600 800 1000 1200 1400 1600 1955 1958 1961 1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 £bn GDP (LHS) Trade (LHS) 0% 10% 20% 30% 40% 50% 60% 70% 80% 0 200 400 600 800 1000 1200 1400 1600 1955 1958 1961 1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 £bn Trade as % of GDP (RHS) GDP (LHS) Trade (LHS)
    • 0 50 100 150 200 250 300 350 400 450 0 50 100 150 200 250 300 350 Imports£bn Exports £bn Goods Services Exports=imports 2012 0 50 100 150 200 250 300 350 400 450 0 50 100 150 200 250 300 350 Imports£bn Exports £bn Goods Services Exports=imports 2012 1955 0 50 100 150 200 250 300 350 400 450 0 50 100 150 200 250 300 350 Imports£bn Exports £bn Goods Services Exports=imports Source: ONS Balance of Payments quarterly dataset UK runs a deficit on goods trade but a surplus on services #StatsTradeEvent
    • In 2012, which country did the UK export the highest value of goods and services to? A) France B) USA C) Germany D) China E) Netherlands Source: UN; Value of Goods and Services exports #StatsTradeEvent
    • Key partners – Export destinations, 2012 Source: ONS; Value of Goods and Services exports #StatsTradeEvent
    • Key partners - trends Source: ONS Balance of payments; Values goods and services #StatsTradeEvent Exports=imports
    • In 2012, roughly what percentage of exports were in services? A) 20% B) 40% C) 60% D) 80% Source: ONS Balance of Payments #StatsTradeEvent
    • Foreign Direct Investment #StatsTradeEvent
    • Global trends FDI stocks Source: UNCTAD, 1980-2012 #StatsTradeEvent
    • In 2012, what position did the UK rank in terms of the value of global FDI inflows? A) 2nd B) 4th C) 6th D) 8th Source: UNCTAD #StatsTradeEvent
    • Importance of investment to UK economy 0 400 800 1,200 1,600 1966 1970 1974 1978 1982 1986 1990 1994 1998 2002 2006 2010 £bn Year FDI inward stock FDI inward stock FDI outward stock Nominal GDP Source: ONS Balance of Payments and National Accounts #StatsTradeEvent 0 100 200 1966 1970 1974 1978 1982 1986 1990 1994 1998 2002 2006 2010 £bn Year 2000 2007 FDI inward flows FDI outward flows
    • In 2011, who was the UK’s biggest inward investor in terms of FDI? A) France B) USA C) Germany D) Ireland E) Netherlands Source: ONS Balance of Payments #StatsTradeEvent
    • Key Partners – Origin Country for UK inward FDI stock Source: ONS Balance of Payments, Values 20112002 #StatsTradeEvent
    • In 2011, which broad industry group accounted for the largest share of the UK’s inward investment stock? A) Production B) Distribution C) Services Source: ONS Balance of Payments #StatsTradeEvent
    • Key sectors – UK inward investment stock by industry Source: ONS Balance of Payments 2011 #StatsTradeEvent
    • Recent trends and challenges #StatsTradeEvent
    • Changes in an exchange rate can have a powerful impact on a country’s trade balance and therefore its economic performance When the market value of the pound falls against other currencies Depreciation Trade Balance
    • Export markets increase consumption of UK goods UK buyers reduce import consumption UK Exports are less expensive UK Imports are more expensive The effect of the depreciation: Date £/$ UK (£10) Export price Q3 2007 £1.0/$2.02 £10 $20.20 Q1 2009 £1.0/$1.44 £10 $14.40 Date £/$ UK (£10) Import price Q3 2007 £1.0/$2.02 £4.90 $10 Q1 2009 £1.0/$1.44 £6.94 $10
    • -12 -10 -8 -6 -4 -2 0 2 4 6 1988 Q1 1998 Q1 2008 Q1 Total Trade Balance 60 70 80 90 100 110 120 -12 -10 -8 -6 -4 -2 0 2 4 6 1988 Q1 1998 Q1 2008 Q1 Sterling Effective Exchange Rate LHS RHS Index, Jan 2005=100Sterling effective exchange rate and balance of UK trade £ billion Source: ONS, BOE
    • Sterling effective exchange rate and UK import and export values, current prices, seasonally adjusted 60 65 70 75 80 85 90 95 100 105 110 0 20 40 60 80 100 120 140 1990 Q1 1992 Q1 1994 Q1 1996 Q1 1998 Q1 2000 Q1 2002 Q1 2004 Q1 2006 Q1 2008 Q1 2010 Q1 2012 Q1 Total Exports LHS Total Imports LHS Sterling Effective Exchange Rate RHS £ billion Index, Jan 2005=100 Source: ONS, BOE
    • Potential explanations for UK trade performance since 2007 Import penetration Growth in key export markets Competitiveness Role of oil InnovationProduct quality Inelasticity of exports/imports Low export supply capacity Financial Services
    • 0 20 40 60 80 100 120 140 Q1 1998 Q1 2000 Q1 2002 Q1 2004 Q1 2006 Q1 2008 Q1 2010 Q1 2012 Financial Services Non-Financial Services Index, 2010=100 The volume of UK services exports, seasonally adjusted Source: ONS
    • 0 2 4 6 8 10 12 14 1998 Q1 2000 Q1 2002 Q1 2004 Q1 2006 Q1 2008 Q1 2010 Q1 2012 Q1 £ billion Exports of Oil Imports of Oil UK trade in oil, current prices, seasonally adjusted Source: ONS
    • 0.00 0.05 0.10 0.15 0.20 0.25 0.30 1948 1952 1956 1960 1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012 Proportionofgrossfinalexpenditure Imports: Gross final expenditure Imports as a proportion of total gross final expenditure, current price, seasonally adjusted Proportions Source: ONS
    • 90 95 100 105 110 115 120 125 80 85 90 95 100 105 110 Importpenetration Relative import price 1998-2007 2008-2009 2010-2012 Quarterly import penetration against the relative import price, chain volume measure Non seasonally adjusted, 1998=100 Source: ONS
    • 90 95 100 105 110 115 120 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Quarters since the depreciation France 1992 Germany 1992 United States 1992 France 2007 Germany 2007 United States 2007 Index, Initial sterling depreciation=100 GDP growth in selected major trading partners relative to initial sterling depreciation Source: ONS, OECD
    • -15 -10 -5 0 5 10 15 20 Q1 2007 Q3 Q1 2008 Q3 Q1 2009 Q3 Q1 2010 Q3 Q1 2011 Q3 Q1 2012 Q3 Canada France Germany Italy Japan UK US Annual Producer Prices Inflation rates for the G7 economies Source: IMF %
    • Why it’s important to improve Trade Statistics E-Commerce Rotterdam Effect Trade in Value-Added
    • Conclusions #StatsTradeEvent
    • #StatsTradeEvent • Trade 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 undertaken • Official trade and investment statistics tell us about the current position and changes overtime • However, as business behaviour and activity change so must the statistics produced to ensure they remain relevant • Engaging with users to inform developments is vital