Funferal

Trade and economic performance in the European Union

Regular readers will know that I often like to dip into official statistics as a means of monitoring changes in society and economy, something I picked up during my time working in telecoms. My most recent foray has been taking a look at new figures (PDF) for the trade balance of the Euro-zone and the so-called EU-25. So, what are the interesting points to observe here?

• The Euro-zone had a trade surplus for 2005 as a whole, but a deficit for November and December. This compares to a surplus in November and December of 2004. Overall, the surplus for 2005 was much lower than in 2004:
  

  During 2005, euro-zone trade recorded a surplus of €23.4 bn euro, compared with €71.5 bn in 2004.

• Broken down by sector, the difference between 2004 and 2005 (€48.1bn) is, as you might expect, almost exactly the same as the growth in the trade deficit in energy. For the 11 months Jan-Nov, it grew from €123.4 bn to €177.1 bn, an increase of €47.7 bn.
• Looking at the top 10 trading partners of the euro-zone (again for the 11 month period), the increase in deficit with China (from €47.5 bn to €67.3 bn) and Russia (from €16.8 bn to 28.8bn) account for a little over half the increase in the deficit.
• The euro-zone has a healthy – indeed growing – trade surplus with the US, now at €58.7 bn for Jan-Nov 2005, and a surplus with the UK that has decreased somewhat (from €57.3 bn to €49.2 bn). The change in the balance with the UK is due to both lower exports (down 2%) and higher imports (up 3%, in euro terms). I wonder if imports of energy from the UK is part of this issue?
• Only 8 of the 25 EU members have net trade surpluses (looking at intra-EU25 and external trade). Ireland’s trade surplus is the third largest at €31.9 bn (a slight decrease from 2004’s €32.1 bn, due to an increase in imports of 8% compared to growth in exports of 4%). This is just behind the Netherlands, at €32.5 bn, though the Netherlands’ total trade is about 4 times the size of Ireland, unsurprising given its much larger population. Germany, meanwhile has a €149 bn surplus. As for the UK? They’ve a deficit of €93.4 bn.
• Interesting stat: the UK’s trade deficit continues to grow (up €0.1 bn) even though exports are growing at 9%, compared to imports growing at 6% – a consequence of the huge difference in size between the two. Exports are currently about 3/4 the size of imports (in euro terms).

If we move to look at the EU-25 figures we can see some other interesting statistics on the health of Europe as a whole:

• The EU-25 has a trade deficit of €106.4 bn, compared to a deficit of €62.9 bn in 2004.
• The energy deficit grew enormously, from €134.2 bn to €198.9 bn, but was off-set by growths in other surpluses, particularly in machinery and vehicles.
• Both the euro-zone and EU-25 have deficits with Japan (€16.9 bn and €27.0 bn respectively) and, predictibly China, India and Russia. While there is double-digit growth in imports from each of these last three, there is only double-digit growth in exports to two of them. As we keep hearing, China’s consumption (of imported goods) is growing nowhere as fast as its exports. In fact, for the EU-25 Chinese imports increased at 23% but exports rose by only 6%.