EXPORT-IMPORT AS A FACTOR OF THE SPANISH ECONOMY

“The growth in Spanish exports in January-August 2014 contrasts with the declines seen in France (-2%) and the United Kingdom (-15.6%) but is lower than the growth seen in Germany”

By JACK WRIGHT
Source: Gobierno de España La Moncloa*

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Brazil, Russia, India, China

The Euro remains stubbornly strong against the world’s main currencies. This fact plus the economic deceleration in the emerging countries have sent Spain into a serious re-think. Imagine the following facts:  Demand from non-EU countries weakened during the first eight months of 2014 (the latest available figures). Specifically, exports to non-EU countries fell by 3.5% year-on-year and accounted for 36.5% of the total. Among others, exports shrank to the BRIC countries and the Middle East. [On the other hand, the period saw strong growth in exports to South Korea (+115.6% year-on-year), Taiwan (+78.6%), Japan (+17.9%) and the United States (+14.9%).]

This situation has led Spain to re-focus on the Eurozone. Accordingly, in the first eight months of 2014, Spanish exports to the Eurozone and the European Union grew by 3.9% (+2.8% in 2013) and 3.6% (+4.4% in 2013) respectively. Especially noteworthy is the increase in exports to Germany, (5.9%), Portugal (8.1%) and the Netherlands (10.3%). This has increased the proportion of Spanish exports accounted for by the EU, 63.5% of the total to date this year compared with 61.8% in the same period last year.

In terms of contribution to the rate of change in total exports, the main export destinations at a worldwide level were Germany (which accounted for 0.6 percentage points of the increase in total exports in January-August 2014, mainly due to the increased export of motor vehicles and motorcycles); the United States (0.6 points, mainly due to growing exports of oil and oil derivatives and motor vehicles and motorcycles); Portugal (0.6 points, particularly associated with the oil and oil derivatives and other foodstuffs subsectors); and South Korea (0.4 points, mainly due to increased exports of oil and oil derivatives and gas).

Spain’s largest customer is France. The other two major Spanish partners are Germany and Italy. The proportion of the EU from total Spanish exports rose to 62.6%, compared with 61.8% in the same month the previous year.

The autonomous region (of Spain) with the best export results in the period January-August was the Region of Valencia, which contributed a 0.6 point year-on-year increase to total exports, followed by Castile Leon, Catalonia, Navarre, the Region of Murcia, and the Basque Country.

The most dynamic sectors were the automotive sector, whose exports grew by 4.8% and accounted for 14.5% of the total; the food, beverage and tobacco sector, whose exports increased by 4.7% in the period and accounted for 15.6% of the total; and the manufactured consumer goods sector, whose exports grew by 6.6% and accounted for 9.1% of the total. The most dynamic subsectors, those with the greatest contribution to export growth this month, were oil and oil derivatives (1.5 points, led by exports to France, South Korea, Greece and Italy), clothing (0.7 points, mainly due to increased exports to France, Poland, Italy and Portugal) and aircraft (0.5 points, especially to the United Kingdom).

The eurozone

In terms of exports to non-EU countries (37.4% of the total), these fell by 7.1% in August as a result of influences caused by the shrinking of certain emerging economies. It is worth highlighting Spanish exports to Latin America (-28.8%), specifically Venezuela (-73.5%), Brazil (-22.3%) and Mexico (-16.5%). In the first eight months of 2014, Spain’s scary trade deficit stood at 16.48 billion euros (a deficit of 8.42 billion in January-August 2013). The non-energy surplus stood at 10.38 billion euros while the energy deficit fell by 4.4% to 26.86 billion euros. The coverage rate stood at 90.5%, 4.4 points lower than for the same period last year (94.9%).

Imports amounted to 173.67 billion euros, up by 5.8% in the same period of 2013 and boosted by increased domestic demand. In real terms, imports grew by 8.3% due to the downward trend in prices measured using UVIs (2.3%).

By way of comparison, it should be worth noting that the growth in Spanish exports in January-August 2014 contrasts with the declines seen in France (-2%) and the United Kingdom (-15.6%) but is lower than the growth seen in Germany (+2.8%). Outside the European Union, US exports were up by 3.3% while Japan posted growth of 2.8%.

Bank of Spain (in Madrid)

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*Gobierno de España La Moncloa (http://www.lamoncloa.gob.es/)

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IMAGE CREDITS
>BRIC map byFelipe Menegaz (http://commons.wikimedia.org/wiki/User:Felipe_Menegaz ) . CC-BY.SA 3.0
>Eurozone map by the EU
>Bank of Spain by Luis García (Zaqarbal):  http://commons.wikimedia.org/wiki/User:Zaqarbal . CC-BY-SA 3.0