Spanish exports stagnate after hitting historic highs

Overseas trade has hit record levels but has been slowing since July and was stagnant in September

Antonio Maqueda

Spanish exports reached a historic high in the first nine months of 2016, growing year-on-year in terms of revenue by 1.2%. Data published by the Secretary of State for Commerce on Monday shows that foreign trade has generated €188.49 billion so far this year. What the figures don’t show is that Spain seems to be caught up in the overall slowdown of global trade. The country is performing better than most of its competitors, but its overseas sales have been decelerating steadily since July, to the point that in September, growth was zero.

Have Spanish exports reached their peak?
Have Spanish exports reached their peak?EFE

That said, only Germany and Italy have registered export growth so far this year – of 1% and 0.5% respectively – while the UK’s has fallen by 4.5%, France, a 1.5 % dip, the United States, 5%, China, 6.8%, and Japan, a hefty 9.2%.

From January to September, Spanish exports to the European Union grew by 3.9%: the EU is far and away the country’s biggest market, making up 66.5% of the country’s overseas trade. But sales to the rest of the world have fallen: by 2.3% to the United States, by 1.4% to Japan, by 8.2% to South Korea, by 25.1% to Saudi Arabia, and by 11.35% to Latin America.

The automotive and food industries have contributed the most to Spain’s exports

By contrast, there has been growth in exports to China (11.8%), to Canada (9.1%), to Morocco (15%) and to Chile, where growth was 3.3%.

Until recently, China was investing in mainly German machinery and equipment, but as its growth model shifts toward greater internal consumption, there is growing demand for consumer goods and foodstuffs.

Spain’s newly installed Secretary of State for Commerce, María Luisa Poncela, said on Monday that China is helping boost Spanish exports at a time when Chinese imports are declining. She added that she expected Canada’s new trade agreement with the European Union will help further improve trade.

In the wake of this summer’s Brexit vote, exports to the UK seem to be falling, due in large part to a weaker pound. Trade rose by 8.8% over the course of the year, but fell by 1.5% in September. In August it barely rose by 1.2%, a significant slowdown on the previous 12 months.

Spain seems to be caught up in the overall slowdown of global trade

Although Spanish exports grew by 3.2% in volume in the first nine months of the year, the 2% fall in prices amid a highly competitive market translated into a 1.2% growth in terms of revenue. Imports grew by 2.7%, but prices fell by 4.2%, which explains the 1.6% fall in imports. As a result, between January and September, Spain’s trade deficit was around €13.2 billion, 29% lower than for the same period in 2015.

In large part the improvement is due to falling prices, and particularly the collapse of oil prices. Spain’s energy import costs have fallen by 30% up to September, the same proportion as the improvement in its trade balance. That said, the increase in crude prices is beginning to be felt: September’s figures show that the cost of energy imports fell by 19%, compared to the 30% figure for the rest of the year.

The automotive and food industries have contributed the most to Spain’s exports, growing by 8.5% and 6.2% more, respectively. The Secretary of State for Commerce says the 8% increase in capital goods represents “the modernization of units and an advance indicator of activity.”

English version by Nick Lyne.

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