17/5/16: Euro Area Exports of Goods Down in 1Q 2016

Euro area trade in goods data for 1Q 2016 is out today and the reading is poor.

On annual basis (not seasonally-adjusted figures), extra-EA19 exports of goods were down in 1Q 2016 to EUR485.8 billion from EUR492.0 billion a year ago, a decline of ca 1% y/y. Imports - sign of domestic demand and investment - dropped 3%. As the result, EA trade balance for goods trade only rose from EUR46.8 billion in 1Q 2015 to EUR53.9 billion in 1Q 2016.

Out of the original EA12 countries, Ireland was the only one posting an increase in extra-EA19 exports in 1Q 2016 compared to 1Q 2015 (+3%), while the largest decrease was recorded by Greece (-20%) and Portugal (-17%).

On a seasonally-adjusted basis (allowing for m/m comparatives), exports extra-EA19 fell from EUR167.3 billion in February 2016 to EUR165.1 billion in March 2016, reaching the lowest point in 12 months period. Due to an even sharper contraction in imports, trade balance (extra-EA19 basis) rose to EUR22.3 billion from EUR20.6 billion.

More details here: http://ec.europa.eu/eurostat/documents/2995521/7301989/6-17052016-AP-EN.pdf/70c12e75-2409-44f5-9403-fdb3eb816d1a 

13/7/2014: Up, Down the Current Account Ladder

For quite some years now, Irish Governments have been keen promoting Ireland's 'unique' external balances performance that, allegedly, made us so distinct from other 'peripheral' countries. Our external balances were booming, we were told by the Government. Ireland's external surpluses are its unique strength, said the boffins at the Brussels think tanks. We are not like Portugal or Greece or Spain when it comes to the 'real' 'competitive' economy.

The hiccup of course, is that this rhetoric was ignoring few little pesky facts, such as the source of our external trade 'competitiveness' or the shifting composition of our trade. Nonetheless, it had some teeth: we started with a much higher base of exports in the economy and stronger external balances than other 'peripheral' states.

Still, in the world of crisis-related 'adjustments', the rate of change matters as much as the starting levels. And judging by IMF data, our rate of improvement in external balances is not that unique:

Per chart above, trade-attributed current account adjustments (the pink bar) for Ireland are higher than for any other peripheral economy. But net adjustments (accounting for income and transfers) are only third highest. This, in part, is due to the fact that vast majority of our exports are supplied by companies that increasingly ship more profits out of Ireland (and this is even worse if we are to account for profits temporarily retained in Ireland by the MNCs).

Still, good news: our trade balance is doing well. Better than any other 'peripheral' in the sample...