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Manufactured Goods (Trade Imbalance)

Volume 77: debated on Friday 26 April 1985

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asked the Secretary of State for Trade and Industry what is the statistical basis for the figures given for group 418 starch on pages 10 and 15 of the memorandum submitted by his Department to the Trade and Industry Committee and reproduced in its report on the growth in the imbalance of trade in manufactured goods, Session 1983–84.

The component series used in the calculation of the ratios given in the UK memorandum submitted to the Trade and Industry Committee are series for sales by UK manufacturers of the principal products classified to each activity heading in the standard industrial classification (Revised 1980) and the "Overseas Trade Statistics" analysed by industry. Home demand is calculated as sales by UK manufacturers plus imports less exports.In the case of starch, group 418 of the standard industrial classification, sales by UK manufacturers of the principal products of the industry are extracted from the results of the

Quarterly Sales Inquiry conducted by the business statistics office. Sales of waste products and receipts for work done are excluded, and an estimate is made for the sales of establishments not contributing to the inquiry.

In the published analysis of overseas trade by industrial category each tariff code in the "Overseas Trade Statistics" is allocated to the appropriate activity heading in the standard industrial classification. For the starch industry, therefore, the estimates of overseas trade represent total trade in all tariff codes thought to be principal products of group 418 of the standard industrial classification. The ratios in table B1 of the memorandum are constructed using trade figures calculated on this basis. In the analysis of trade performance published in "Business Monitor MQ12", "Import Penetration and Export Sales Ratios for Manufacturing Industry", a further refinement is incorporated. Tariff codes identified to be waste products or second hand goods are excluded from imports and exports in order to bring the trade figures as near as possible to the same coverage as sales by UK manufacturers. The ratios given in table B2 of the memorandum are compiled on this basis.

In most industries, trade identified as waste products or second hand goods is negligible and even more so when import penetration (or export performance) is broken down by country. Consequently as a result the figures in table B1 are normally consistent with those in table B2 in the memorandum. However, in the case of the starch industry, more than half of the 1982 imports were of waste products. The ratios given in table B1 for this industry are therefore not directly comparable with those given in table B2. Deduction of waste products from EC imports gives a ratio of EC imports (including Spain and Portugal) to home demand of 20 per cent. for the starch industry in 1982. This figure is consistent with those given for the starch industry in table B2 of the memorandum.