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Economy in Brief

EMU Trade Gap Stays Negative
by Robert Brusca  February 17, 2011

In EMU exports are slipping faster than imports and that is keeping the trade deficit in negative numbers. This month Imports fell a bit faster than exports but not by enough to flip the deficit into positive territory.

The sequential growth rates tell the story, as export growth rates slip from 18% to 2% to 1.5% over horizons of 12-Mos to 6-Mos to 3-Mos, respectively. Exports are in a clear slowdown mode. Meanwhile, for imports the growth rates segueway from 23% to 3% to then pick up to 13% over spans of 12-mos to 6-Mos to 3-Mos respectively. Imports tell a less clear story.

In EMU exports of foods manufactures and other goods are slowing. Raw material exports are accelerating largely because of prices. Imports are declining for food and for manufactures, but the import decline for manufactured goods is less than the decline for exports. Imports of other goods are rising. Raw materials, of course, are accelerating because of prices.

On balance the export and import growth rates both are slowing down so we canít use the trends to say that we more certain about growth. But imports are holding up better than exports and over three months the import growth rate had picked up; that is something. Meanwhile as of December EMU export growth rates were down to a 1.5% annual rate despite what has been strength from Germany.

Euro-Area Trade trends for goods
  M/M% % SAAR
  Dec-10 Nov-10 3M 6M 12M 12M Ago
Balance* € (2,318) € (3,234) € 1,458 € (664) € 1,053 € (4,026)
EXPORTS
All Exp -0.4% 0.0% 1.5% 1.9% 18.4% -2.6%
Food and Drinks -2.6% 2.8% 2.9% 5.1% 15.9% -1.6%
Raw materials -3.8% 2.2% 17.5% 11.3% 24.2% 20.6%
Other -0.2% -0.3% 1.0% 1.5% 18.4% -3.1%
  MFG -2.2% 0.1% -5.9% -3.5% 16.5% -4.5%
IMPORTS
All IMP -1.1% 4.9% 13.4% 2.8% 23.1% -6.1%
Food and Drinks -2.9% 2.8% -4.7% 3.0% 14.7% -6.7%
Raw materials -1.5% 4.2% 15.8% -0.9% 40.4% -17.7%
Other -1.0% 5.0% 14.6% 3.0% 22.8% -5.5%
  MFG -3.5% 2.5% -3.8% -6.0% 18.3% -6.4%
*Eur mlns; mo or period average (SA, WDA)
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