The more than three thousand entrepreneurs and managers in the export sector (goods) consulted by the National Institute of Statistics (INE) assume a year 2023 that will be somewhat disastrous for their sales abroad, INE showed in the six-monthly survey “Prospects for Exports of Goods”, released yesterday.
Business leaders predict an average nominal increase in exports of only 1.1% in 2023, which means that leaving out the export deflator (the implied inflation in these products), several sectors are likely to experience declines in export volumes ( the fair value after discounting inflation).
This 1.1% average increase (result from surveys conducted last December) is the weakest in INE’s data, dating back to 2014, when this survey began being conducted by the institute.
That is, value only increases (and not in all commodity classes) because companies offset the crushing real billing with a deterioration in final selling prices, which stimulates growth in final nominal values (counting in the deflator of exports). ).
The segments that are struggling are those of “food and beverages” where businessmen predict a 5.9% increase in the value of exports. If the implied inflation in this type of export is of this size or higher, it means that volumes in 2023 could decline compared to 2022.
To give you an idea, according to INE, the export deflator in the last four quarters, ending in the third quarter of last year, was more than 14%. Even if this inflation slows down somewhat (say, to half) over the course of 2023, we will still have quite significant implied price increases, in the range of 6% or 7%.
The export of “industrial supplies” is the export chain where pessimism is greatest. Entrepreneurs expect a nominal fall in exported value of 1.1%.
Exporters of “machinery, other capital goods (excluding transport equipment) and accessories” are said to be more relaxed, expecting a nominal growth of 8.2% in their foreign sales.
The road also seems narrow in the “transport equipment and accessories” segment: the forecast for an increase in turnover is around 6.2%.
INE has no values available for the “fuels and lubricants” export sector.
Doing world trade in times of crisis
The greater pessimism of these entrepreneurs compared to the current year is justified.
Inflation remains very high, around 8%, interest rates will continue to rise sharply and many investments are in indefinite cautious mode or even waiting for less uncertain days.
Something similar is happening with customers in Portugal. Confidence is not abundant in this time of crisis and war whose end is not in sight in Ukraine.
In the government budget for this year (from October), the government predicts that the pace of total exports will fall from 18% in 2022 to approximately 4% this year. In November, the European Commission predicted even worse: real growth of only 2.3% in Portuguese sales abroad.
In this first forecast (the second round will be conducted in May and the results will be published on July 28) “the forecasts of exporting companies point to a nominal increase of 1.1% in their exports of goods in 2023 compared to the previous year , predicting a 1.7% increase in exports to markets within the European Union (EU) and a 0.3% decrease to countries outside the EU”.
INE explains that “Companies’ expectations for the evolution of their exports of goods in 2023 differ across different sectors of activity, with some expected increases due to price increases and others decreasing due to the forecast contraction in demand and planned interruptions or interruption of production lines”.
It is the “response to market conditions, disruptions in global value chains and rising factor costs.”
In addition, “uncertainty about the evolution of prices is cited by companies as a factor significantly affecting their export forecasts for 2023”.
“The current situation of uncertainty, reflected in the results of the economic climate indicator recently published by INE, well reflects the difficulty that companies indicate in building a perspective on the evolution of exports of goods for the year 2023 if whole,” he adds to the institute.
In addition, “the opinions of companies, especially those of the manufacturing industry, on global demand and in particular on external demand (order book), taking into account companies with production oriented towards the external market, presented values in the range of -15 percentage points in the second half of 2022 and companies expect no improvements before early 2023,” concludes INE.
For this research, INE consulted “3293 companies, representing approximately 90% of total goods exports in 2021”.
The sample consists of “active exporting companies based in Portugal, which have reported export values of more than 250,000 euros”.
Luís Reis Ribeiro is a journalist for Dinheiro Vivo
Source: DN
