Friday, 8 April 2016

Weekend discussion: statistics

Matthew Lynn in the Telegraph takes an interesting look at the Eurostat intra-EU trade numbers:
Eurostat, hardly an anti-EU source, has just published its latest analysis of the degree and depth of trade within the EU. 
It ranks all the 28 countries based on the share of their exports that go to other countries in the Union. So where was the UK? Right at the very bottom of the table, with only 44pc of the stuff we sell abroad going to the EU. 
The only other country below 50pc was tiny Malta, basically a financial and tourism centre, on 45pc. All the other 26 nations are selling more than half their exports within the EU, some overwhelmingly so. The average across the EU is 62pc. We are running at half to two thirds the levels of other European economies. 
It is a similar, if not quite so dramatic story, on imports. We are third from bottom of that league table, with the rest of the EU accounting for 54pc of our imports – a reflection mainly of the huge deficit we run with the rest of Europe. The only countries below us were Greece and the Netherlands, on 53pc and 46pc respectively.
His conclusion: that the EU is not key to the UK's economic position in the long term. 
Why is that? The answer is pretty simple. The EU economy has stagnated – GDP is still some 6pc below what it was back in 2008 – while the rest of the world has been growing far more quickly. In that context, the findings are not very surprising. It is far easier to sell stuff to people with plenty of money than to people with not much of the stuff.
There are three important points that come out of that, however. The first is that it explains why the UK will be the first country to vote on leaving the EU. It simply doesn’t matter that much to us.
Do read the whole thing. Over a glass of French red.

31 comments:

Steven_L said...

The EU economy has stagnated – GDP is still some 6pc below what it was back in 2008 – while the rest of the world has been growing far more quickly.

Now I know CU likes to disagree with me on this one, and you might too. But when you adjust GDP against a mixed basket of currencies (or even just convert to USD) are you sure we've outgrown the EU? Into 2008 we were still $2/£1 and E1.5/£1, we're now 30% below that in USD and 15% below that in EUR.

In terms of GDP per capital in PPP, the UK is behind many EU member states according to 2015 figures.

Blue Eyes said...

Good question!

I don't necessarily say that the UK has got wildly richer than the Eurozone, but the UK does seem to have got well past its previous peak unlike Italy, Spain et al. and the Eurozone as a whole.

However, what my feeling is that the UK has done very well on intangible stuff and very badly on heavy stuff, and the intangible stuff is both easier and much harder to trade.

If you think I am equivocating it is because I also think the stats do not really tell the full story of the UK's outlying position... and why I think the current account figures make it look worse than it is...

Steven_L said...

Well I get paid more £ now than I did in 2008, about 40% more. But I still get paid a little less $ than I did in 2008. I imagine this true for a lot of folk and probably UK GDP as a whole you know.

MyJoyfulName said...

@Steven_L - loving your contributions here of late.

As an aside, one of my kids is doing the 11-plus/grammar exams atm.
Tonight I noticed one of the sections in his practice maths paper is 'Misleading Statistics'!!

There is hope!!!!

Devil's Kitchen said...

"Over a glass of French red."

No, thanks, BE. I far prefer a bottle of Chapel Down Bacchus Reserve, i.e. English white.

DK

Demetrius said...

Devil's Kitchen, good to see a man of discrimination and good taste. Mind you a bottle of Chateauneuf du Pape might be appropriate.

andrew said...

I don't necessarily say that the UK has got wildly richer than the Eurozone, but the UK does seem to have got well past its previous peak unlike Italy, Spain et al. and the Eurozone as a whole.

Like many things, it depends on what you are looking at:-

My personal measure is a 'cheese index' - what range of cheeses can you see in the local deli / waitrose - and that is still well below 2008.

Just like my last pay rise. I got 2%. CPI is 0.3%. My OH has had 0% for the last few years. I thought 'better than nothing'
My younger colleagues got about the same but they have had their rent rise by 10% in the last 12m. They think 'WTF' and look for a better job.

OTOH, since last summer, some of them are actually finding those jobs, unlike most of the time since '08

... and it depends on who you are.

In the EU, if you are greek you are still in financial crisis and if you are polish, you wonder what crisis people are talking about.

The same applies here in the UK. The experience of a londoner will be different to that of someone in the north-east.
This is not new (Jarrow March).

... and it depends on where you live.

dearieme said...

"Over a glass of French red". Central Otago Pinot Noir for me, or a Barossa Shiraz, or a Coonawarra Cab Sauv, or a Mclaren Vale Merlot, or a Hawkes Bay Gamay, or a Chilean Carmenere, or an Argentinian Malbec.

We even had a decent red from Suffolk once.

andrew said...

If you can find it...
eastcott vineyard in darkest devon makes v.v. nice wine.

(my only connection is that I buy from them ~once every 2 years)

Electro-Kevin said...
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Electro-Kevin said...

Nobody objects to being friends with the EU or trading with it (it was once called the Common Market, when we last voted.)

It's the political union that folks are worried about now - and with it the free movement of people and their right to be treated as indigenes, and now the assumption that there are no indigenes. Like it or not that is why our country has demanded a referendum, xenophobic as it may seem. *below*

No country's people can be rich or benefit from their own efforts in this union. As soon as an economy succeeds the youth of the EU drifts to that economic hotspot, kills the wages and drives up the rents.

What on earth is the point in that ?

"Three million jobs will be lost !"

Well at least we won't have several million people coming here to compete for them.

My recruitment consultant friend said to me today "Yes. The Continentals here definitely have a better work ethic." and I agree - but that is another issue that needs to be dealt with.

*I wish I could coin a phrase. It is not xenophobia - rather a fear of being usurped. A loss of one's privilege as a national.

Electro-Kevin said...

I did read the article. I agree that trade should not disappear on Brexit. That it might would only be through an act of pure spite on behalf of the EU.

andrew said...

I just read the article.
It is mid - April and I am so bored of this.

Not one solid reason for going and not one clear credible example of what will be better if we go.
To be fair, when I read the pro-staying articles I see not one solid reason for staying and not one clear credible example of what will be worse if we go.
A pox on both houses.

As SL said, the shift in trade balance is probably due to shifts in the £ against the EUR and USD.

For better or worse, we sell services, not widgets, and the countries/people who buy services tend to be up the income scale.
The growth of trade with the ROTW could simply be a reflection of the fact the ROTW is getting richer.
I hope that as a lot of time goes by, places like China move up the income scale and buy more services from us - but there is no guarantee of that happening.
Germany sells lots of widgets to china at the moment - but there is no guarantee of that continuing.

Nick Drew said...

Steven L - recall this?

http://www.cityunslicker.co.uk/2015/11/oh-america.html

Blue Eyes said...

"As soon as an economy succeeds the youth of the EU drifts to that economic hotspot, kills the wages and drives up the rents. "

That is kinda the point... of a single market.

Electro-Kevin said...

Blue - I didn't have to suffer the single market when I was young. Which is why I - with my meagre talents and education - bought a beautiful 3 bed house (within 20 minutes of central London) on a single wage and could pay for my wife to stay at home with the kids and educate them.

It's also why I'm scheduled to retire at 55, mortgage free - and did it with ease. (That's not down to my unionised job - it's down to the fact that I got onto the housing ladder when homes were affordable and could bung loads of money into an AVC.)

I know it's vulgar to mention such things - but what do I have to say to you to make you realise that the single market has done you no favours ?



andrew said...

EK,

I think you may be confusing the UK planning system, globalisation, and the decline of DB pension schemes with EU membership.

All benefit capital at the expense of (some) individuals.

If we leave the EU, we will not be building lots more homes in places people want to live in the short or long term.
If we stay in the EU, we will not be building lots more homes in places people want to live in the short or long term either.

Actually, I could argue the UK planning system has more victims in the UK than EU membership.

My (possibly repetitive) point being :- for normal people, being in or out of the EU will make little difference(*)


(*)Short of the uk ceasing to trade with the rest of the world - like N. Korea - in which case we would have bigger problems.

Electro-Kevin said...
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Electro-Kevin said...
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Electro-Kevin said...

Andrew - I don't think so.

But even if we disagree - my laments that things have got MUCH worse in Britain for people stand up (the recent post on France - and us having to pay for gadgets.)

What's more the house we bought got "Ooh. Lovely *little* place." and "Yeeees. Well I suppose it's a good start." from our peers. Ours was the most modest among police constables, office administrators, service engineers, bricklayers...

It would now cost me about 15x my then income (not 3 as I paid then.) I can't afford to buy it back, not even with my 'overpaid' salary and huge deposit. This is North Bushey/Watford we're talking about. Not Islington.

Accept the bullshit about out of date planning laws if it makes you feel better. Something much worse than that has happened.

andrew said...

my first house was in oxhey village!

Electro-Kevin said...

AKA Carpender's Park. (I lived within view of the Harlequin)


But more seriously - on planning laws: no-one could have planned for the unexpected rise in population we are seeing now. No amount of planning relaxation is going to cope with the rise in population we are going to see.

This country was actually very dirigiste (thanks for the new word, Blue.) It had decency laws, courts that knew right from wrong, teachers that enforced standards (sometimes with moderate violence), police officers that policed (sometimes with moderate violence), parents that parented (sometimes with moderate violence) and a Conservative party that conserved. The planning laws are from those times.

When we are asked "What is Englishness ?" we are not being asked a question at all but being told that our country no longer exists, so we should shut up about it.



Blue Eyes said...

Andrew, you are spot on. Lots of things have happened in a relatively short period. Britain's economy has recovered from its long-term decline. The demographics have been changing rapidly and, more importantly, we have started to do something about it (c.f. some other European countries). Globalisation has led to the outsourcing of mass industry and lower-skilled work to lower-wage countries. At the same time family structures have altered. The population has been rising, but mainly in one part of the country, which had until recently been in steady decline and thus we had become used to not investing in infrastructure and housing.

Those who timed it well have done extraordinarily well out of the fairly quick turnaround. I am not sure when the population of London bottomed out, but it was around the mind 1980s. Until the late 80s boom kicked things off, London land traded at negative real values: i..e. the reconstruction cost of the average house was *more* than the resale value.

But instead of discussing all the issues, with a view to solving some of the problems that have arisen due to economic success, let's just blame the EU, Polish plumbers, and leftie bloggers.

Electro-Kevin said...
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Electro-Kevin said...

The bottoming out in London took place in 1992, to be precise. Maastricht. Prior to the Blair administration in 1997, that's when it really started to take off.

The squeegie gangs came before the plumbers.

The so-called economic success comes with a hell of a lot of government and personal debt. It is based on London property values, in turn pushed up by overcrowding. A gigantic Ponzi scheme.

In 1991 London was relative bliss. Affordable housing, available doctors, hospitals, schools...

Electro-Kevin said...

Interestingly 1991 is a significant year in terms of Govt debt. It certainly reflects my experience and feelings about the so called economic recovery. I got this quote from the FT on debt to GDP: "...reaching an all time high of 89.40 percent in 2014 and a record low of 31.30 percent in 1991. Government Debt to GDP in the United Kingdom is reported by the Eurostat."

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adham said...



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adham said...



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adham said...



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