Rebalancing hopes helped by strongest exports on record Manufacturers have been trying to build a larger presence in developing markets to counter the weakness in Europe, and it appears to be paying off. Exports to China, including, Hong Kong hit a record £4.68bn in the second quarter, a rise of 8pc on the previous three months. The strength of the UK's performance outside Europe helped offset continued weakness with the country's biggest trading partner. The goods deficit with EU, which accounts for about half UK trade, broadened from £4.6bn to £5.4bn in June. However, the overall goods deficit for June fell from £8.7bn in May to £8.1bn, the lowest since July 2012. Including services, for which the surplus rose from £6.1bn to £6.5bn, the total trade deficit narrowed from £2.6bn to £1.5bn in June, the smallest deficit since January. That was also helped by the gathering recovery in the US. Britain's established goods surplus with the US hit a record of high of £3.7bn in the second quarter, as exports increased 3.3pc and imports fell 1.3pc. Blerina Uruci, an economist at Barclays, said Britain's trade performance should improve further as the recovery in the EU picks up. "Net trade performed poorly over 2012 owing to unfavourable external demand and in particular the weakness in the euro area," she said. However, as economic conditions in the UK's main trading partners improve gradually this year, we expect the trade deficit to narrow as well. Martin Beck of Capital Economics said: "It looks like net trade should add marginally to growth in the second quarter, following its healthy contribution in the first quarter." George Osborne was given another boost by the ONS with the official June construction data. It showed that the sector, which which accounts for 6.3pc percent of the economy, rose 1.4pc in the second quarter - marginally better than the 0.9pc estimate the ONS used to calculate GDP growth of 0.6pc. The ONS said the revision was not enough to cause a upwards revision of one decimal place on its own, but it reinforced the 0.6pc estimate.