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HM Revenue and Customs has released its Customs Importer and Exporter Population official statistics for 2023, showing a decrease in the importer and exporter population compared to 2022.
These statistics report the number of importers and exporters named on a customs declaration during the calendar year and cover the movement of goods between Great Britain (GB) and the European Union (EU) or the United Kingdom (UK) and non-EU countries. Being named on a customs declaration effectively means that the business was responsible for moving goods either into or out of the country.
When considered alongside other data points, these metrics may help to provide some indication of a nation’s economic well-being.
Generally, a high population of importers and exporters indicates robust international trade and economic diversity and fluctuations in these populations can signify shifts in economic growth, sectoral health, and overall market dynamics.
While it does not always directly equate to an unhealthy economic situation, a decrease in the number of importers and exporters is not a good sign for the UK.
Here are our key takeaways from this latest data.
In 2023, the population of businesses named on a customs declaration was 350,107, a 2% decline from the 356,559 named in 2022.
While it can be challenging to pinpoint the exact reasons for this decline, several possible macro factors likely played a role in one way or another.
Challenges such as inflation or economic downturns may have discouraged businesses from engaging in international trade to avoid growing economic uncertainty. This would only have been exacerbated by ongoing global supply chain issues, which would likely impact the ability or willingness of companies to import or export goods.
Additionally, while Brexit took effect in February 2020, some businesses may still have been dissuaded by the added complexity and costs of trading with the EU in a post-Brexit world.
Of the firms that moved goods between these two years, 98,061 only did so in 2022 but not 2023, 91,609 only in 2023 but not 2022, and the remaining 258,498 moved goods in both years.
This indicates that, while there was a small net decline in UK businesses moving goods across borders, it emerged from a considerable amount of fluctuation in the number of traders from year to year.
Around 28% of those active in 2022 did not move goods across the border in 2023, while 26% of those that did in 2023 had not done so in the year before.
This may suggest that many UK businesses are responding to economic pressures, regulatory changes, or shifts in market demand, with the net decline reflective of individual business decisions to start or cease trading activities year-to-year.
The number of firms moving goods to or from countries in the EU decreased by 4% in 2023 compared to 2022 (from 242,029 to 232,309), while the number of firms moving goods to or from non-EU countries increased by 1% over that same period (from 232,216 to 233,787).
This simultaneous decline in the number of firms trading with EU nations and an increase in the number of firms trading with nations beyond the EU may point to UK traders diversifying away from their European counterparts.
However, looking at the Office for National Statistics’s (ONS) data on the total value of UK trade with the EU and with non-EU nations shows that UK-EU trade remained relatively stable from 2022 to 2023 (£502.9 billion v £503.2 billion), while the total value of the UK’s trade with non-EU nations declined by 13.4% (from £524.1 billion in 2022 to £454.1 billion in 2023).
Effectively, while a smaller number of UK businesses traded with the EU in 2023 versus 2022, the total value of that trade remained largely unchanged, indicating that the average value of trade from each participating firm increased, albeit slightly.
Further, while a greater number of UK firms traded with non-EU nations in 2023 versus 2022, the total value of those trade flows declined substantially.
The number of firms importing decreased by 2% in 2023 compared to 2022 (from 319,235 to 312,555), and the number of firms exporting decreased by 1% (from 143,888 to 142,684) over the same period.
Looking again at the ONS data for 2022 and 2023, there was an 8.2% decline in the total value of UK imports in 2023 versus 2022 (from £633.6 billion in 2022 to £581.3 billion in 2023) and a 4.4% decline in the value of exports (from £393.5 billion in 2022 to £376.0 billion in 2023).
This indicates that, on average, the firms that ceased importing and exporting each comprised a relatively larger share of the UK’s total import and export value, respectively.
Overall, the HM Revenue and Customs 2023 statistics on the UK’s customs importer and exporter population highlight several potential trends and shifts.
Despite a slight overall decline in firms trading across borders, substantial yearly fluctuation indicates a changing and dynamic trade environment.
Notably, a decrease in businesses trading with the EU alongside an increase with non-EU countries suggests a diversification in trade partnerships in the face of changing geopolitican and economic relations between the UK and EU.
The stable value of trade with the EU despite fewer trading firms points to larger transactions per firm, while the rise in non-EU trading firms contrasts with a decline in trade value, signalling economic adjustments and responses to broader market conditions and regulatory landscapes.
