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Economy in Brief

by Robert Brusca EMU Trade Balance Moves Lower but is Still in Uptrend July 19, 2007

Exports and imports both on slowing trends but export growth remains the stronger flow.

May imports grew slightly faster than exports in May, but by a very small amount. But over 3 and 12 months export growth has been decidedly stronger. Yr/Yr and six-month patterns show exports at a clear growth advantage to imports. But over three months imports close the gap for several key trade categories although exports remain much stronger over three months in the aggregate.

So far Euro trends continue to support the maintenance of a trade surplus. Yet, both export and import flows are faltering. And we know that the euro has been climbing and there has been a lot talk about the impact of the strong euro. We have just passed another month in which we cannot point to evidence that the strong Euro has become a problem for Euro trade trends. But that remains a factor to look out for in the coming months. Euro trade trends are not showing any withering growth yet that we can clearly say looks like an FX issue. And exports still outpace imports. So far so good.

Euro Area 13-Trade Trends for Goods
  M/M% % SAAR
May-07 Apr-07 3M 6M 12M
Balance* €€ 3,566 €€ 3,652 €€ 4,201 €€ 2,801 €€ 994
All Exports 1.2% -0.3% 7.3% 6.1% 9.3%
Food and Drinks -- -0.7% 1.3% 0.7% 10.1%
Raw materials -- 0.2% 0.1% 7.0% 12.2%
MFG -- -1.4% -4.2% 3.1% 9.1%
All Imports 1.3% 1.2% -2.2% 6.6% 4.2%
Food and Drinks -- 0.1% 13.4% 5.7% 10.0%
Raw materials -- 0.5% 0.5% -7.9% 16.5%
MFG -- -1.6% 0.8% -0.3% 6.7%
*Eur mlns; mo or period average; Gray shaded areas lag one month
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