Economics Q&A: Does the UK economy achieve a trade surplus in anything?

The answer is yes! Although the British economy has overall run a large deficit in the balance of trade in goods and services for many years, if we look a little deeper underneath the trade statistics we can reveal a comparative advantage in a number of industries. Many of them are in the service sector which - as a whole - has generated sizeable and growing annual trade surpluses for the best part of two decades.

Britain’s global competitive advantage tends to lie in high value added manufacturing industries - for example precision steel products, aerospace and pharmaceutical products, along with a raft of business, legal, financial and creative services. Indeed the UK tops the global league table for the annual value of exports of creative goods - revenues drawn from the sale of TV series overseas and from exports of books from UK publishing houses, films, live music and theatre tours and events.

For 2009 as a whole

Trade balance in goods -£82,365m
Trade balance in services +£49,277m

Data for 2009 shows an annual trade surplus (£billion) of
• £8bn in chemicals (organic and inorganic)
• £7bn in medicinal products (pharmaceutical)
• £5bn in mechanical engineering products
• £4bn in architectural and engineering services
• £2bn in research and development industries
• £2.5bn in legal services
• £0.7bn in iron and steel
• £0.5bn in beverages (drinks)
• £0.4bn in advertising & market research
• £0.3bn in textile fibres
• £0.3bn in metal ores

Set against this there are some huge annual trade deficits. In 2009 for example the UK ran a trade deficit of over £21bn in electrical products - from iPads and laptops to irons and toasters and a £12bn gap between exports and imports in clothing and footwear.