Between January and March, the drive from the foreign sector allowed GDP to accelerate its growth to 0.5% quarterly and 3.8% year-on-year, making Spain the most dynamic economy in the entire European Union compared to the previous year. In a context of sharply rising financing costs due to the rise in interest rates -which, together with inflation, has affected household consumption and savings by reducing their purchasing power-, Spanish companies have taken advantage of lower price levels than in other neighboring countries and lower energy costs to gain market share internationally and gain muscle.
Not only that, since the country has secured a base of more than 55,000 regular exporters -those who have sold their merchandise internationally in the last four years- and each time this type of company has been gaining weight over the total number of exporters. that sell abroad, going from representing 25% in 2019 to 30% in the last year. The achievement is evident because it has taken place in a period marked by the coronavirus pandemic and the breakdown of global supply chains, first, and by the economic consequences of the Russian invasion of Ukraine, the energy and inflation crises and the financial turmoil, afterwards.
Since 2019, just before the global health crisis broke out, these regular exporters have recorded 8.3% to reach 57,332 in the whole of last year, according to data from ICEX Spain Export and Investment. This implies that the number of companies in this situation accumulates three consecutive years above the barrier of 55,000. It is true that in 2022 it fell by 3.2% compared to the 59,206 of the previous year, although they did so in relation to a year that was marked by the economic rally that achieved recovery from the pandemic. More significant, however, is that, despite having fallen in number, regular exporters shot up their volume of sales abroad by 22%, catapulting them above 350,726 million euros last year.
In the latest data available, which cover January to March and coincide with the acceleration in activity after the stagnation that GDP disturbed between July and December of last year, the same behavior can be seen. The number of regular exporters falls slightly in year-on-year terms to 45,247, but the amount of merchandise sold abroad increases by more than 17% to 96,006 million. Over the last few years, more smaller companies have been incorporated into this group, since in 2019 those who exported more than 50,000 euros represented 48% of the total and that percentage was reduced to 45% at the end of the last financial year.
In general, the profile of the exporting companies outlines a fairly faithful picture of the composition of the Spanish productive fabric, with a very strong presence of the smaller ones. The vast majority sell less than 5 million euros a year abroad, although the ones that have achieved the most in percentage in relation to the pre-covid period are the companies that export merchandise worth 250 million or more. This type of exporters grew by 37.5%, followed by those with a turnover of between 50 and less than 250 million (which increased by 29%) and the smallest, which have tried to face the difficulties they encountered throughout this time in the domestic market opening its production to the international market. They are companies that export less than 5,000 euros a year and their number has shot up 26% since before the pandemic to 14,104.
The Eurozone continues to be the large market for national companies, with France, Germany, Portugal and Italy as the main destinations by amount of exports, given that only these countries accumulate 41.7% of the total, around 146,132 million. Outside the euro area and by country, the United Kingdom, the United States and Morocco have also gained relevance. Spain exports mostly industrial products and technology, which represent almost seven out of every ten euros of total sales abroad, as well as fuels and lubricants, agri-food products, consumer goods and beverages.
The engine of the economy in the face of an unexpected environment
The strength of the foreign sector has served to offset the slowdown in consumption caused by the rise in interest rates and the increase in the prices of the shopping basket. “The reactivation of the Spanish economy is not based on household consumption which, weighed down by high inflation, is still 5% below pre-pandemic levels,” says Oriol Aspachs, director of the Spanish Economy at CaixaBank Research. In fact, household consumption within the country has fallen by 1.5% in real terms in the last two quarters (in nominal terms it does register a positive growth rate).
The expert points out that during the coming months, the national economy will have to continue to overcome an adverse and complex environment. Everything points to the fact that the growth rate of its main trading partners will continue to be modest, and it cannot be ruled out that some of them could go into recession. In addition, the increase in interest rates by the ECB will continue to put pressure on the spending and investment capacity of families, but also of companies. “It will be difficult for the Spanish economy to maintain the growth rate of the first quarter. But, for now, the year has started on the right foot,” he adds. Disaggregated GDP data for the Eurozone are not yet available, although the results for France and Spain, as well as the figures provided by various statistical institutes, reveal the “continued weakness of domestic demand”, according to Aline Goupil-Raguénès , Ostrum AM strategy.