UK clothing and textile exports recorded growth in the second quarter, new figures show, despite a decline in overall UK manufacturing due to the impact of the coronavirus.
According to the Lloyds Bank International Trade Index, the UK Manufacturing Exports Index fell to a 25-year low of 34.6 the second quarter. The speed of decline was the fastest since data collection began in 1996, driven by the impact of coronavirus on both international supply chains and falling overseas demand for British goods and services.
The previous historic low of 38.8 was recorded in 2009 amid the global financial crisis. A reading below 50 signals a reduction in new export orders, while a reading above 50 indicates growth.
On the plus side, monthly figures for April (25.2), May (33.9) and June (44.9) provide evidence of a turnaround. In June, 24% of manufacturers reported growth in export sales. Growth, whilst initially driven by the easing of lockdowns in Asia, is increasingly supported by improved sales to the US and continental Europe.
Around 61% of the survey panel reported a drop in manufacturing export sales in April, but this proportion eased to 48% in May and 33% in June.
For the second quarter, UK clothing and textiles saw growth (33.6), and for the month of June this reached 50.7 on the Index.
The end of the second quarter of 2020 saw early signs of international demand returning with June showing an increase in appetite for British consumer goods.
China, after posting a reading of 42 in the first quarter, was the only UK export market to see an increase in the second quarter (52.6), as the country’s lockdown measures eased.
“The results demonstrate the full impact of the pandemic as swathes of the global trade markets shut down amid efforts to help contain the spread of the virus,” says Gwynne Master, managing director and global head of trade for Lloyds Bank Global Transaction Banking.
“Export measures hit an all-time low in Q2 although we see small signs of recovery as early as May and into June. While it is too early to talk about the trajectory of recovery, it is encouraging to see enhanced external demand, signs that China’s economy is stabilising, and some UK consumer goods’ export growth in June.
“Government schemes and finance options continue to be made readily available, which will help UK exporters continue to trade, to position for a return to normality to international trade, and to prepare now for potential future disruption.”