UK: HOW THE UK COMPARES WITH ITS EC PARTNERS.

UK: HOW THE UK COMPARES WITH ITS EC PARTNERS. - The advent of the single market finds the patterns of trade within Europe as chequered as ever. The graph (top, left) shows the balance of intra-EC trade in manufactured goods for the four main trading part

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Last Updated: 31 Aug 2010

The advent of the single market finds the patterns of trade within Europe as chequered as ever. The graph (top, left) shows the balance of intra-EC trade in manufactured goods for the four main trading partners in the EC - France, Germany Italy and the UK. Since the abolition of border controls in January these will be the last figures available under the old system of customs-based trade statistics. Figures from the new system of company VAT returns will not be known with any degree of accuracy until mid-1993.

The graph clearly demonstrates a two-tier Europe, with Germany and Italy maintaining healthy trading surpluses with the rest of the EC, while France and the UK remain submerged in the red. Though the fluctuations of trade in the UK, France and Italy appear contained within a relatively narrow band, Germany's surplus in manufactured goods has fallen steeply to 60% of its 1990 level.

According to KPMG's Centre for Manufacturing Consultancy, the effects of the collapse of sterling and tentative signs of recovery in the UK's manufacturing sector are beginning to show when compared with the performance of our European counterparts, themselves now firmly in the grip of recession. Though France and Germany might be thought to benefit from their location at the heart of the Community, there is little statistical evidence that this is the case. Italy, like the UK, is on the fringes of Europe but appears to perform just as well as Germany.

The general economic outlook for the UK is one of tentative growth. Most significantly, manufacturing output in most regions is forecast to rise throughout 1993 as the continued effects of the devaluation of sterling feed through into increased competitiveness. Overall growth in manufacturing is forecast by economic consultants Business Strategies at 2.4% this year, in contrast to a growth in GDP of 1.5%.

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