After three consecutive years of growth and contributing to the Gross Domestic Product (GDP), the foreign sector is beginning to show signs of weakness, especially in the sale of goods abroad, and experts already predict that its contribution to the economic growth of Spain next year will be null or even negative.

Exports of goods have fallen 3.7% year-on-year in volume – quantity sold – in the first eight months of the year, according to data from the Ministry of Industry, Commerce and Tourism published this Thursday based on Customs information updated until August.. The general increase in prices, however, has allowed the country to have invoiced a total of 1.8% more for sales to other countries, since although we have sold less, we have sold it more expensive. The decline is not only due to the weakness of demand, but also to the fall in the base of exporting companies, since there has been a decline in the number of companies that export sporadically due to the feeling of insecurity and inflation..

The automobile sector (vehicles and components) is the one that best resists uncertainty and the drop in international demand, with an increase in sales in monetary terms of 27.9% year-on-year; while exports of capital goods have risen 11.8% – with a special rebound in the sale of transport equipment -; and food, beverages and tobacco have been exported 5.7% more – in this group sales of all products have increased, except for oils and fats, whose sales have dropped 8.1% due to their exorbitant rise in prices. .

They are the only three groups that keep Spanish exports afloat, since so far this year we have sold fewer energy products (-22.4%), raw materials (-17.6%), non-chemical semi-finished products (-11 .1%), durable consumer goods (-0.6%) and consumer manufacturing (-0.4%). In these last two groups, the drop in sales of household appliances (-8.3%) and clothing (-6.7%) stands out.

By geographical area, sales to the European Union are holding up (they are 3.3% higher so far this year) despite the economic slowdown that the continent is experiencing and it is striking that despite the technical recession in Germany during the last quarter of 2022 and the first of 2023, exports to that country have been 11.7% higher than last year and in August they were still in growth territory. Sales to the rest of Europe (+8.9%) and those to Latin America (+16.8%) also remain positive, while those to North America (-2.3%) and especially Asia and Africa (-7.1% and -7.8%, respectively).

The drop in exports of goods so far this year has been partially offset by the rise in exports of services, both tourist and other types: transportation, logistics, telecommunications, consulting, patent and trademark services, repair, maintenance , health, financial, etc.. The evolution of these sales abroad is recorded in the trade balance data of the Bank of Spain, which is published quarterly..

According to the latest update, for the second quarter, tourism income (what foreign tourists spend in Spain) has increased by 25.2% in the first half of the year, to 35,643 million euros, due to the recovery of international travelers , the increase in overnight stays and the rise in prices. For their part, exports of non-tourist services (services offered by Spanish companies and hired by non-residents) have increased by 14.2%, up to 46,677 million euros in the first half of the year..

“Non-tourism services have more capacity to incorporate margins than the industry, due to competition and by their very nature.”. The indicators we have, with all caution, indicate that they have gone quite well, contributing positively and in a certain way counteracting the commercial deterioration of the balance of payments. Today there is a decoupled behavior between both types, although sooner or later they can be affected,” Raúl Mínguez, director of the studies service of the Spanish Chamber of Commerce, doctor in Economics and specialist in foreign trade, explains to EL MUNDO..

Zero or slightly negative contribution

This expert warns that if the drift in exports of goods “was contagious to that of services, not because of a fall but because of less dynamism, foreign trade could have a slightly negative contribution to economic growth next year.”.

The Spanish Chamber of Commerce will update its growth forecasts at the beginning of November and Mínguez already points out that the contribution of foreign trade for this year will be revised downwards, but that it will be compensated by the good performance of domestic demand. For 2024, however, it warns that it will have “a zero contribution”, or even a slightly negative one, which “will not have the prominence that it has had in other times, which represents a weakness for the Spanish economy”, since a A healthy growth pattern is one that is supported by both internal and external demand..

Funcas agrees with this forecast, warning this Thursday that “the deceleration will be evident more clearly in 2024, due to the carryover effect of the last stretch of this year, and the lower momentum of some of the current growth factors: normalization of tourism and the agreements to recover the purchasing power of salaries, with its corollary in terms of disposable income of households and private consumption (…) GDP will advance by 1.5% and growth will come mainly from demand internal, while the contribution from the foreign sector will be zero”.

In recent years, exports have been key to supporting the recovery after the pandemic and, in particular, those of services. “Spanish exports increased by 12.9% from the fourth quarter of 2019 to the first quarter of 2023. The weight of exports in GDP, in real terms, has increased from 34.5% to 39% (in nominal terms it has gone from 34% to 42.4%). When the evolution of Spanish exports (+12.9%) is compared with those of the Eurozone (9%), the main difference is found in the advance of sales of services abroad (+33.9% compared to + 10.1%), since those of goods have had a moderately worse performance (5.4% compared to 8.1%). In real terms, goods have gone from representing 23.7% of GDP to 25%, while services have gone from 10.8 to 14.5%,” BBVA Research states in a report on foreign trade published this June.