Monday, 11 February 2013

Greek Exports 2012 Update: some potential green shoots..?

I was trawling through trade data these days, so it was a good chance to write up a post on Greek exports and how they fared in 2012. Well, data for the whole of 2012 are not available, so the piece will be about how Greek exports fared in the 10 months of 2012, but I hope you will allow me that.

Look at the first chart.

source: Eurosta, own calculations
As you can see, according to my calculations, the value of Greek merchandise exports rose by about 13% in the Jan – Oct 2012 timespan, on a nominal basis. If one looks at export quantities (my favourite measure) then Greek merchandise exports posted a 15% increase.

I had talked about the distortion in the overall export figures due to the parabolic rise of oil products exports backin the summer of 2011. It is interesting to see, how exports fared after oil products exports have been subtracted. It turns out that the rise in value terms is below 3% but, here comes the interesting part, quantity-wise exports rose by about 10%.

That is the exact opposite of what happened in 2011. Back then exports, rose by 11% after being adjusted for oil products but decreased by 7,6% in quantity terms.

What does that mean? It means that the spike in 2011 was purely due to pricing and even masked a decline in demand for Greek products, while in 2012 a pick-up in demand for Greek products was recorded. A further point (probably the most important too) should be made here regarding that fact, but I will come back to that later.  

I would now like us to take a look at how each segment of Greek merchandise exports performed. 

source: Eurostat, own calculations

Once more, the Oil Products segment was the top performer, followed by Crude Materials, Beverages and Tobacco and Machinery and Transport Equipment. What is of note here is that Manufactured Goods classified chiefly by material posted a decline in value terms and Miscellaneous Manufactured Articles were virtually flat. 

Maybe some of you would be interested in having a picture of which segment is more important in absolute terms.

source: Eurostat, own calculations

Oil Products top that table too, followed by Manufactured Goods classified by material, Food and Live Animals, Chemicals and finally Machinery and Transport Equipment.

Now, I would like to cross-check how export values and export quantities for each segment fared.

source: Eurostat, own calculations

What is encouraging is that most segments witnessed an increase in export quantities, hence external demand. The first 4 codes, witnessed growth in export quantities but that growth was inferior to the growth in export values, so part of the increase in exports of these categories was due to pricing.

Chemicals witnessed a slight decrease in export demand, so the anemic growth recorded was due to pricing.

Now, what I was referring to earlier in the post. Manufactured Goods classified chiefly by material, witnessed a decrease in export value BUT a quite robust spike in export quantity. That was the case too for Miscellaneous Manufactured Articles, with the sole difference that they were flat in value terms. On the other hand, Machinery and Transport Equipment posted increases in both value and quantity terms. Could it be that the effects of internal devaluation have been passed through to export prices? If that is the case, we can see that the overall effect in export values was not positive thus far. Does that by any chance remind you of the J-Curve effect?  In other words, prices are faster to adjust than volumes but volumes ultimately follow posting an increase that leads to a rise in the value of exports. If that is the first part of the J-Curve effect that we’re witnessing, then export volumes should increase further and over-compensate for the lower prices of goods due to the internal devaluation. Fingers crossed that this is the case here.

Finally, here is the breakdown of growth in Intra-EU15 and Extra-EU 15 shipments.

source: Eurostat, own calculations

Positive growth comes from Extra-EU15 with Intra-EU15 shipments being a drag, as is the case for most Euro Area countries (after the overall figure has been adjusted for Oil Products).

To wrap this up, Greek merchandise exports from January till October 2012 grew marginally in nominal terms (after being adjusted for Oil Products) but not that shabbily in quantity terms. There were some sings that the first part of a J-Curve-like effect could be in progress as far as industrial products are concerned. If that proves to be the case, then in the future we should see exports (of industrial products) in value terms, rise significantly and make up for lower prices charged (of course the fact that a fair number of countries are trying to pull the exact same trick could prove to be detrimental here). Finally, as far as growth drivers are concerned, all growth came from extra-EU15 shipments with Euro Area stagnation proving to be a drag here.

Wednesday, 6 February 2013

EU27 countries' Merchandise Exports: IntraEU stagnation, ExtraEU growth

For some time now I wanted to do a snapshot of merchandise exports growth for EU countries. Unfortunately, full year data for exports are not yet available and the lag that they do become available is one source of frustration for persons (like the author) who spend their time looking at statistics and poring over spreadsheets, but we’ll make do with what we have.

What I think would be rather interesting is look at the breakdown of growth between the intra-EU15 and Extra-EU15 segments. 

First, I would like us to take a look at intra-EU15 export growth.

source: Eurostat, own calculations

As you can see for the vast majority of EU countries that particular market was not a source of growth, as far as the Jan-Oct 2012 interval is concerned. What’s more, Euro Area countries bar for less than a handful, out of which only one was a member of the so-called core, did not post any growth worth mentioning.

Now let’s take a peek at extra-EU15 export growth.

source: Eurostat, own calculations

The picture here is the polar opposite of the one above. Bar for two countries, all others recorded robust growth. What is of note here is that my native Greece ranks third in the relevant table.

This of course, makes me skeptical, since in the past aggregate figures of Greek exports were skewed by phenomenal growth in the Oil Products segment. Taking that into account I hope that you will allow me that slight modification to see if that is the case here too.

Here is the chart for Intra-EU15 exports after Oil Products are subtracted.

source: Eurostat, own calculations

The picture here is not altered meaningfully in terms of ranking, it is just that a few more countries slipped into negative growth territory (Portugal being one of them).

Here is the chart for Extra – EU15 exports. 

source: Eurostat, own calculations
Some quick takeaways from the chart. Growth in Extra-EU15 Portuguese exports is apparently not due to mineral fuels exports and is indeed rather robust, as is growth for Cypriot and Baltics’ exports. On the other hand, Greece slipped from the 3rd place to the 15th of the said table, meaning that the lion’s share of exports growth still comes from Oil Products.

To wrap this up, growth for EU countries’ merchandise exports originated mostly from the Extra-EU15 segment. The fastest growers were the Baltic countries, along with Central and Eastern Europe (CEE) countries and Southern Euro Area coutnries undertaking internal devaluation. 

P.S. Figures used here are nominal.