What's in a year?

Not that we're declaring ourselves to be clairvoyants, but the fact that Spanish merchandise exports reached an all-time monthly high of 21.59 billion euros in July handily confirms a point that we've solitarily been making in Twitter threads over the last few months - that the supposed weakness in external orders over the first half of 2014 was more a matter of the coincidence of a couple of capital goods outliers a year earlier and an economic commentariat continually proving itself incapable of escaping the tyranny of the headline.

Highlighting (out of respect for the two quarters that the 'end of the export boom' story dragged on) the six-month sum of foreign deliveries, the chart shows clearly the serendipitous occurrence of huge prints in two components of the capital goods sector - public works machinery and aerospace -  in the first two quarters of 2013. A return to a more normal less-than-two-percent weight after having doubled their contribution over the first part of that year produced that much lamented five and a half percent drop from their peak through June 14. Looking at goods exports excluding these two components reduces that fall by two full points.


Bottom line no. 1 - using annual comparisons on data that show little or no calendar-related cyclicality is the road to analytical ignominy. It's one thing to measure same-month tourism statistics from one year to the next, but another to assign any significance to the timing of a large Airbus order.

Bottom line no. 2 - rumours as to the death of the Spanish export sector are maybe a little exaggerated.

Charles Butler, with contributions from Javier García Echegaray and José Domingo Rosello.