Trade deficit numbers in Spain for the first quarter mask the fact that between April and June, overall exports fell by 2% or 60.9 billion euros. This is remarkably slow compared to the same time period last year, when exports were up 12%.
When exports pick back up, the recovery can resume. Hopefully, the trade deficit will rebound in Q3. Results from last quarter sounded the alarms across Spain and show that the crisis did not inspire us to change our production model as was hoped. Good export numbers during the crisis suggested a new normal that today's numbers call into question. Even though big companies are booming, many of our country's smaller companies are still struggling, because their size puts them at a disadvantage. As for spending at home, we are starting to see slight increases for many of the small- and mid-size companies that have elected to focus on domestic sales instead of exports.
Most of our exports go to other EU nations, so slack spending in Germany and France in Q2 had an adverse effect. In the third quarter, a weak recovery in Europe and the conflict in Russia will continue to undermine exports and call for swift action from the government in order to keep the economy afloat.
