When domestic demand is weak, economies rely on exports. But when demand is weak in all countries, so are the respective imports and therefore individual economies find it difficult to export. In the last year, international trade has recorded a sharp slowdown and the markets are unable to absorb global production: as a result, exports have also decreased. This is what emerges from the latest analysis by Congiuntura ref. on world trade.
HOLDING OF IMPORTS IN ADVANCED ECONOMIES
The main cause of this global slowdown is the drop in imports in advanced economies, which is in line with that of industrial production, stable since December (also due to the Japanese slowdown after the Fukushima disaster). In the absence of dynamic outlet markets, exports also decrease.
THE EAST IS THE DRIVING FOR DEVELOPMENT
However, the difficulty of world trade is mitigated by the robust demand of emerging countries, above all the Asian ones and above all China. Industrial production, like import demand, have reached pre-crisis levels in those areas. This great concentration of demand has conditioned the growth opportunities of exports, benefiting the more integrated economies in these areas. The countries with the strongest export dynamics are those that have better contacts with Asian countries: Australia, New Zealand, Japan, Korea and the United States. In Europe, only Finland approaches the same levels. The fact that development is concentrated in markets so distant from us remains a problem for European industry: trade is concentrated in those areas and countries outside them lose market shares.
EXPORT PERFORMANCE: ITALY DOES BAD IN EUROPE
According to an export performance indicator elaborated by Congiuntura.ref, which also takes product quality, price competitiveness and specialization into consideration, Italy is in a worse position than the other major European economies. Europe is therefore on average worse positioned on the Asian markets, not only for reasons of simple geographical distance but also for the effect of the appreciation of the euro against the dollar, and therefore against the Chinese yuan, which to a certain extent limits our ability to take advantage of the driving force of demand in the Asian area.
THE RESTRICTIVE MANEUVERS COULD BE UNFAVORABLE FOR EXPORTS
For the countries of the euro area, the prospect of a slowdown in the growth of international trade is a cause for concern, as the recovery of exports could progress even more slowly. In addition, the restrictive budgetary policies could have a negative impact on European internal demand, and therefore on intra-area trade.
THE INCREASE IN THE PRICES OF RAW MATERIALS LEADS TO A DETERIORATION OF THE TRADE BALANCES
European countries benefited only slightly from the recovery in the terms of trade as they suffered the consequences in terms of the increase in the cost of raw materials. The increase in the value of imports has led to a generalized deterioration in trade balances. The situation has worsened with the political crisis in North Africa which has increased tensions over the price of oil.
IT IS DIFFICULT TO RECOVER COMPETITIVENESS WITH THE GERMAN ECONOMY
The superiority of Germany's export performance over other European economies is a sign of Berlin's competitive position. The positive reaction to the crisis, the decrease in labor costs and the trend in wage dynamics in the German country make it more difficult for the other European countries to recover competitiveness.
