The adjustments in the seasonal Eurozone trade surplus have expanded in the third quarter from £10.3billion to £11.99 billion which extended its near two-year long surplus. But according to Capital Economics, weaker global demand for the stronger euro are distancing its exports and have already dragged the third quarter GDP for the area.
Notwithstanding the improved performance in the third quarter, Capital Economics do agree that the net trade are most likely to have a negative effect on the GDP which contributed to the sluggish rate of growth to just 0.1 % quarter-on-quarter from 0.3 % in the second quarter.
Eurozone imports have fallen discreetly for the second month in September, which points to a much softer demand domestically speaking. Seasonally adjusted data show that the Eurozone export of traded goods fell by 0.4 % quarter-on-quarter while imports drew closer up by 0.3 % respectively.
The Eurozone’s surplus in goods traded have significantly improved in a five-month high of €4.3billion in September, from €12.3 billion in August and €10.8billion in the second quarter. Eurozone exports of traded goods increased by 1 % month-on-month creeping up to 0.4 % in the same quarter of the last month. Eurozone imports declined 0.3 % month-on-month in the same quarter following a fall of 0.6 % by August of the same quarter.
The Eurozone could really use some help with its efforts in improving global growth over the succeeding months in order to lift the exports made by the Eurozone in support of bolstering business confidence, after the third-quarter slowdown in its GDP.
More timely data such as the PMI orders index reveal that the exporters made significant progress at the start of the fourth quarter. The failure of the index to imitate the improvement shown in several surveys conducted this year point to the fact that exporters might be feeling the pressure of the strong exchange rate.
Furthermore, Eurozone exporters would undoubtedly would like to see the euro fall back even further from the 23-month high of $1.38 that it hit at the start of the 4th quarter which currently positioned at $1.35.