Spanish exports have grown by 49% since 2008, but remain concentrated in Europe | Economy

Spanish exports have grown by 49% in real terms since 2008, “thanks to the dynamism of foreign sales of goods and services, both in the trade and current account balances.” However, as follows from the monograph Spain facing recent impacts on global value chains and international trade integration According to the BBVA Foundation, “a marked regional bias in exchanges – Spain concentrates 67% of industrial exports in Western Europe – limits the deployment of its network of links with other economies”, while the European Union represents only 20%. world economy.

The study, prepared by a team of researchers from the University of Valencia and Ivi, led by professors Francisco Perez and Ivan Arribas, indicates that the share of foreign sales in GDP has increased since the Great Recession of 2008. % to 39%. in 2023, although the European Union’s average growth was slightly higher at 56%: 13 percentage points in the case of Spain compared with 11.7% in Europe.

The expansion of networks with other economies, which Spain partly suffers from, has been very dynamic in other countries this century, especially in Asian countries, which are very price competitive and have a growing capacity to produce final and intermediate goods. the report says. He adds that Spain’s modest specialization in high value-added activities and its dependence on imports limit its national income from exports.

In 2020 (latest data available), 75% of Spain’s exports generated domestic value added, below the 77.4% in advanced European economies and a far cry from the 92% in the US. In conclusion, we note that part of the value of exports corresponds to the value of imports of intermediate goods of foreign origin and therefore rewards foreign production. But the fact is that “part of foreign sales requires the purchase of imported raw materials and semi-finished products,” the monograph emphasizes.

By industry, the export of administrative services demonstrates a higher content of domestic added value (90.6%) compared to the export of transport equipment (59.7%). Only 25.7% of domestic jobs created by manufacturing exports are highly skilled, lower than the 34.9% in the European Union. In the service sector it reaches 27.8%, which is also lower than in developed countries.

This smaller presence in more distant but fast-growing markets, Spain’s modest specialization in high-value-added activities and its dependence on imports limit national income generation from Spanish exports, confirm the researchers of the BBVA Foundation study. And in the case of Spain, the most advanced production does not prevail. In 2020, the “import content” of exports was 25%, and in the manufacturing industry it was 34.8%, while in the services sector it was only 11.5%. Faced with a new wave of globalization, the most developed countries are outsourcing tasks that could be performed by countries with cheaper and less skilled labor. Regarding the regional bias of exports, the study highlights that it is gradually decreasing in European countries.

Impact of Covid and war in Ukraine

Regarding the impact of Covid-19 and the shocks caused by Russia’s invasion of Ukraine in 2022, the study notes that, unlike the Great Recession, which had a long-term impact on international trade, the effects of the pandemic were temporary and, once it occurred, were temporary. The period of economic hibernation has passed, the world has continued the process of integration, the driving force of which is now also the service sector.

Both openness and connectivity declined in 2020 as economies suffered from disruptions in international supply chains and sought alternatives and took refuge in nearby procurement channels. But dense networks of international exchanges have also demonstrated enormous resilience, based on the availability of supply options and the cost advantages of some suppliers. As a consequence, both indicators soon returned to pre-Covid-19 levels in 2021. communications, highlighting in this sense the agri-food sector.

In general, during the pandemic, the most resilient countries were those that had a high concentration of both geographic and sectoral exports, with a particular focus on the production of intermediate goods, the study emphasizes.

In contrast, the war against Ukraine had lingering consequences: a reorientation towards trade flows rather than a reduction in openness and interconnectedness. The intensity varied by economy, especially in countries directly involved in the conflict. Thus, while Russia reoriented its exports to Asia and South America without much impact on its degree of openness, Ukraine saw its degree of openness as well as its connections decline to a greater extent as it reoriented its exports to Europe in side of Europe. damage to the Asian market.

Spain, for its part, did not change the volume of exports, nor did there be a corresponding change in its geographical distribution. According to the researchers, the Spanish economy can strengthen its ability to generate added value in two ways: by improving its participation in global value chains through progressive specialization in higher value-added activities and by expanding the number of destination countries for exports.