The Bank of Spain warns that exports of goods maintain “a weak pulse”

Exports are one of the growth legs of the economy. And its evolution, in the case of trade in goods, is not as good as it should be, according to the Bank of Spain in a study published this Tuesday. The supervisor detects a deterioration in the competitiveness of the most energy-intensive manufactures, in the case of metallurgy for example, due to the increase in the cost of electricity, oil and gas due to the war in Ukraine. In his diagnosis, he points out that this crisis “has affected producers in the euro zone, including Spain, more than those in the rest of the world.”

The entity recalls that the pandemic was a time of strong volatility for these exports, with falls of 6.8% in 2020 and a recovery of 10.6% in 2021. But since then its behavior has been rather discreet: in 2022 it grew a 2.7%, and in the first half of this year “it has maintained a weak pulse, with a decline in quarter-on-quarter terms that was particularly pronounced in the second quarter,” he points out.

The problems for Spain are rather indirect. Coral García Esteban, César Martín Machuca and Ana Gómez Loscos, members of the analysis department who wrote the text, acknowledge that Russia and Ukraine represent a very small proportion of Spanish exports. But in a hyper-connected economy, the impact of the invasion on prices in international markets prevented Spain from remaining immune to these turbulences. “The fact that energy dependence on Russia was lower in Spain than in other EU countries did not prevent the rise in energy prices from harming the competitiveness of Spanish companies compared to other non-European countries,” he explains. .

And it is supported by figures: wholesale gas prices in the euro area were on average 13 times higher than in 2020, while those in the US only multiplied by 3.5 and those in Asia by 9. The conclusion? ? “Compared to other geographical areas, the rise in energy prices affected the euro area more strongly, which, as a result, lost competitiveness vis-à-vis the rest of the world.”

On the positive side, Spain took advantage of its competitive advantages to re-export energy to the EU countries most dependent on Russia, eager for alternative sources of supply. And finally, the damage to the activity of the main European partners was finally less than anticipated. There were no natural gas shortages due to Russian supply cuts, which, if they had occurred, would have triggered a much larger crisis. Both factors have not, however, been sufficient to encourage exports. “In the course of 2023, Spanish foreign markets have experienced an additional slowdown, which has affected the evolution of exports of goods,” he counters.

The Bank of Spain cites other factors as culprits. Global supply disruptions have particularly affected automobile exports, already affected by technological and regulatory changes that are being forced to carry out forced marches to adapt to environmental requirements. And there Spain, the second European exporter of automobiles after Germany, is highly exposed.

better withstand the blow

Even so, it determines that Spain has withstood the blow better than the average for world markets. Due to the aforementioned low exposure to Russia and Ukraine in direct exchanges, and due to the small weight of China, which accounts for only 2% of Spanish goods exports —compared to 8% for Germany—, something favorable given the delicate moment of the giant Asian. If already in 2022 it lowered its demand for imports “due to the severity of the containment measures to stop the pandemic”, at the beginning of the year Beijing has not managed to return to a favorable cruise rate: this same Tuesday it was learned that in July it had suffered the largest drop in its exports (-14.5%) and imports (-12.4%) since the beginning of the pandemic in February 2020.

The data has caught the market by surprise, which was expecting a much lighter setback, despite the voices that have been predicting a worse scenario. Among them, that of one of the actors who best knows the bowels of world exchanges, the Danish firm Maersk, the second largest shipping company on the planet, owner of thousands of container ships that every day move merchandise from one point to another planet, it takes weeks warning that the contraction of global trade “will be longer and deeper” than expected.

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