This article has been prepared mainly by M. Panic and P. L. Joyce of the Bank's Economics Division.
The United Kingdom's trade performance in manufactured goods has been deteriorating for so many years that in a number of important sectors the once large surpluses have virtually disappeared.
One of the most interesting aspects of these trends is that the decline seems to be particularly strong in certain sectors, such as engineering and vehicles, in which the United Kingdom has traditionally done well. Apart from being responsible for a large proportion of UK output and employment, these sectors share a number of characteristics, including a high degree of integration into the world economy.
This article examines the possibility that there may be an important relationship between the extent of an industry's international integration and developments in its trade performance during the 1970s. The analysis uses certain data which have become available only during the last few years. However, it must be emphasised that the data have serious limitations and that, consequently, the results are tentative and suggestive, rather than conclusive.