UK export growth has collapsed to its lowest point since 2015 amidst economic turmoil across Europe, according to the latest European Export Index by accountants and business advisers BDO LLP.
The latest findings from the quarterly index show that UK export growth has continued to trend downwards since its peak in Q1 2017 and is now below the point of contraction of 95.0. BDO’s EU Export Growth Index shows that the growth of UK exports has fallen by 0.7 points to stand at 94.9 in Q4 2018.
The UK is not the only major economy impacted by EU headwinds. German car manufacturers have struggled to meet new emissions standards, which has played a key part in a drop in export growth of 2.6 points to stand at 96.8 in Q4. Meanwhile France – the worst performing major EU economy this quarter – saw its export growth collapse by 4.8 points to 92.8. It is expected that the French economy will fall further as the country contends with widespread protests that are suppressing economic activity.
Many countries in Europe continue to be impacted by political uncertainty and a drop in demand which is driven by a slowdown in economic growth in China and the US. Taking the economic bloc as a whole, the EU Export Growth index increased by just 0.1 to stand at 99.8 in Q4.
Some countries do remain resilient however. Spain was the only country to see an improvement in Q4, with the export growth index rising to 99.1 in Q4 from 98.3 in Q3. Despite the Italian government having a major disagreement with the European Commission over its budget, this has not yet impacted the economy and Italian export growth has remained broadly stable, edging down by just 0.1 points to stand at 100.01 in Q4.
Commenting on the findings, Peter Hemington, Partner, BDO LLP, said:
“Across Europe, economic disorder has led to EU export growth stagnating. Three of the five largest EU economies are battling against political and economic chaos. The French economy is set to suffer further from the gilet jaunes protests, Germany’s car manufacturers are struggling with new regulation and, in the UK, government infighting is taking its toll as we edge closer to a disorderly Brexit.
“Overseas demand has helped sustain the UK economy over the last few years and British businesses are doing all they can to remain resilient despite these challenges. The EU remains our most important trading block but Brexit uncertainty is proving damaging. The government must consider the needs of business. It’s crucial that Britain is seen to be open for business with the EU and other key markets as we enter what is going to be a critical year for the UK.”