Inflation feeds exports that rise 24.8% until June

Inflation feeds exports that rise 24.8% until June

Export activity continues to show strength despite the uncertainty surrounding the immediate future of the Spanish economy. According to data published yesterday by the Ministry of Industry, Trade and Tourism, merchandise exports grew by 24.8% between January and June this year, reinforced by high prices (inflation effect), and reaching the historical figure for the period of 190,919 million euros. In terms of volume, growth was 6.6% year-on-year, since approximate prices per unit value indices increased by 17.1%. While imports shot up 40.7% to 222,882 million. In this way, the trade deficit has solidified, reaching a total of 31,963.4 million euros, of which energy alone already represents 25,894 million. The coverage rate, which is the ratio between exports and imports, was placed at 85.7%.

Among the sectors that contributed the most to the growth of exports, chemical and energy products. Sales of the latter abroad rose by 120.9% year-on-year (17,949.7 million eros) for 65.8% in volume terms. Their prices grew by 33.3% in the first six months of the year.

Once again, the European Union (EU) was once again the main destination for our exports in the first half of the year and more than half were focused on the Eurozone. Specifically, Spain exported 26.1% more than in the previous year to its community partners and 22.8% more to third countries. Especially exports to Latin America (+35%), North America (20.3%) and the Middle East (+24.3%) increased. The autonomies where the export activity increased the most were the Canary Islands, the Balearic Islands and the Community of Madrid. For the Secretary of State for Trade, Xiana Méndez, all of the above is proof of the "great dynamism" of foreign trade and she stressed that this good behavior "reaches all sectors." Regarding the entrenched trade deficit, she attributed this circumstance to the effect of energy products, and "the consolidation in the recovery of domestic demand." She, in addition to the increase in the cost of other products due to the strong rise in energy. “This keeps the trade deficit similar to that of previous months,” Méndez concluded. For his part, the general director of the employers association of internationalized industries AMEC, Joan Tristany, highlights the "consolidation and maturity of the foreign sector that, fundamentally, today is determined by the industries, above all, of goods".

In his opinion, the AMEC representative believes that exports will continue to rise in the second semester, although "we will have to be attentive to what happens with Germany when we enter the autumn and winter since there is no more outbreak of Covid, in addition to the evolution of interest rates and whether or not there will be a rhythm in the decisions of the Federal Reserve and the European Central Bank ». Tristany acknowledges that, among the companies, there was fear that many of the orders could be executed "due to the lack of availability of raw materials" and points to "a slowdown in the rate of growth" and rules out that the inflations of 1 or two%.

less investment

In any case, and despite the good health of Spanish exports in the heat of the boom in orders at the beginning of the year, the industry is beginning to perceive a slowdown in the new demand. Tristany explains that the investment of industrial companies in new equipment is falling for this reason, "which anticipates a slowdown in activity." Although he still does not anticipate if this brake will lead to a normalization of demand, instead the blow will be more important.

All in all, the good pace of sales is not translating into a large increase in profits for Spanish companies. Because the multiple conjuncture of increases in the energy bill, raw materials and transport costs have eaten the margin of the companies and is also triggering their debts.

As this newspaper already anticipated, a multitude of industrial companies they have been forced to over-indebt themselves in order to stockpile supplies and thus avoid future production tensions, like those that many of them have suffered in the last two years. The latest INE statistics on the level of stocks of merchandise in trade already indicated an increase in 'stocks' of more than 14% in wholesale trade during the first quarter.

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