Our chart of the month shows export performance of the major European economies over the last 10 years. What does it show?
- Export growth seems remarkably volatile with substantial change over the years
- All the major European economies show more or less the same pattern of volatility suggesting that overall global factors have a bigger impact on export performance than domestic policies
- In as much as there is variation between countries within the overall pattern, the UK continues to perform relatively well. Brexit notwithstanding, only Spain has outperformed the UK over the period – albeit from a smaller base.
Of course, as the figure below shows, Germany remains the export powerhouse of Europe. Exports are twice the size of the UK and France and account for close to half of German GDP.
What could this mean for the future?
That depends on what view one takes on how the future will evolve. If one predicts a gradual erosion in global trade as the world transforms into balkanised power blocks, trade restricting policies continue to increase, onshoring continues to progress, and growth in the export of services continues to outstrip growth in goods trade, then Germany becomes vulnerable to its goods export dependency whereas the UK might do somewhat better with its strength in services.
If none of that comes to pass and it will be business as usual, then who knows?
As always, predicting the future is a mug’s game.
