17th July 2026
The Office for National Statistics has released the latest UK trade figures for May 2026, and—as is often the case with trade data—the picture is mixed. Some sectors are showing real strength, others are softening, and the overall balance is still firmly in the red. Here’s what matters for readers in Caithness, Sutherland, and the wider Highlands.
Goods Exports Rise, Driven by Strong Non‑EU Demand
The headline positive this month is that UK goods exports rose by £1.5 billion, a healthy 4.5% increase. Most of this came from non‑EU markets, where demand for UK chemicals, pharmaceuticals, metals, and machinery has picked up.
Pharmaceutical exports to the United States were particularly strong, and exports of non‑ferrous metals also saw a notable jump. These are high‑value sectors, and growth here is usually a sign of underlying industrial resilience.
Exports to the EU also nudged up slightly, suggesting that trade flows—after several years of volatility—may be stabilising.
Goods Imports Also Rise, But Energy Drives the Story
Imports increased by £0.5 billion, but the detail matters:
EU imports fell, mainly because the UK bought fewer German cars and less refined oil from the Netherlands.
Non‑EU imports rose, driven by higher crude oil shipments from Nigeria and Norway, and refined oil from the US and Nigeria.
This matters for rural Scotland. When crude and refined oil imports rise because of global price movements, it often feeds through into higher domestic fuel costs—and rural areas like Caithness feel that more sharply than cities.
Services Trade Softens
The UK normally relies on its services sector—finance, business services, digital industries—to offset the goods deficit. But in May:
Services exports fell slightly
Services imports also fell slightly
This is not a crisis, but it is a sign that the UK’s strongest trade performer is losing a bit of momentum.
The Trade Deficit Widens Again
Despite stronger exports, the UK’s overall trade position worsened:
The total trade deficit widened by £4.4 billion, reaching £9.1 billion.
The goods deficit is now £60.9 billion.
The services surplus narrowed to £51.8 billion.
In simple terms:
Exports are rising, but not fast enough to keep up with imports—especially energy imports—and the UK is still buying more from the world than it sells.
Three‑Month Trend: A Mixed Bag
Looking at March–May 2026:
Goods imports rose £9.0 billion
Goods exports rose £5.8 billion
Services imports rose £1.2 billion
Services exports fell £0.1 billion
This reinforces the monthly picture: export growth is real, but import growth—especially in energy—is stronger.
What Does This Mean for Caithness?
For local readers, three points stand out:
Energy imports matter.
Rising crude and refined oil imports often correlate with higher petrol, diesel, and heating oil prices. Rural households, farms, and small businesses feel this first.
Manufacturing resilience is good news.
The UK’s export strength in chemicals, pharmaceuticals, and metals supports jobs across the supply chain, including Scottish logistics, engineering, and port activity.
A widening deficit is not ideal.
It suggests the UK economy is still struggling to rebalance. For rural Scotland, that often translates into higher costs and slower investment.
Overall Assessment: Not Bad, Not Good—Just Uneasy
The May 2026 trade figures are best described as “cautiously mixed”:
Good: Exports are rising, especially in high‑value sectors.
Bad: The trade deficit is widening, and services—the UK’s strongest performer—are softening.
Indifferent: Much of the movement is driven by volatile global energy markets.
For now, the UK is exporting more, but still importing even more and the gap is widening. That’s not a crisis, but it’s not comfortable either.
What it means for Caithness and Sutherland
UK exports rose in May—especially pharmaceuticals and metals—which helps steady engineering and logistics work across the north. Rising crude and refined oil imports point to higher fuel and heating‑oil costs, which hit Caithness and Sutherland harder than most areas. Overall, the UK trade gap widened, meaning more cost pressure than benefit for rural households and small businesses.
Hopefully you found our explanation interesting and simple to understand. And If you would like to read the evidence at ONS go HEREHERE