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Issue 7 2019 - Freight Business Journal
15
Peninsula poised for growth again
Aſt er spending a few years in the doldrums, the Spanish and Portuguese markets have staged a welcome recovery, although there are now signs of another slowdown.
Spain pauses, Portugal paints a mixed picture
Spain’s economy is showing signs of a slowdown again, though probably not to the extent of earlier in the decade when the country entered deep recession along with much of the rest of southern Europe. According to Bloomberg, growth slowed more
than
expected in the second quarter, adding to the general gloom in the Euro region. However, the reduction comes at the end of a period of sustained recovery when Spain’s economy was for many years among the fastest growing in the bloc – and indeed its expansion of 0.5% for the quarter still far outpaces the Euro zone as a whole. With Prime Minister Pedro
Sanchez struggling to form a new government, growth in industrial production and investment weakened while retailing, transport, hotels and restaurants were all fl at aſt er a strong fi rst quarter in 2019, says Bloomberg. Spain though is not alone
in experiencing a slowdown. Growth in the Euro-zone was only about 0.2% in the second quarter, much of it as a result of global trade tensions. But the current quarter’s
performance needs to be put in context. BBVA research says, in its latest report, that Spanish GDP
growth may reach 2.2% for 2019 as a whole and 1.9% in 2020. While this is somewhat below the level expected three months ago (2.4% and 2,0%, respectively), it would still lead to around 630,000 jobs being created in two years and to a decline in the unemployment rate down to a relatively low 12% by the end of the following year. Activity is increasing despite
weak and uneven performance of private investment and exports, BBVA adds. Spending on machinery and equipment and export sales are expected to recover, following the declines seen in the second half of 2018. Uncertainty over world
trade, regulatory changes in the
automobile sector and
uncertainty surrounding economic policy have all taken their toll. Even the mighty Spanish tourist
trade remains
volatile, with signs of a slowdown as the country becomes less competitive compared with other destinations. The FT sees a change of track
from the export-based model that brought Spain back from the depths of recession to one underpinned by consumer demand, aided by pay increases instigated by the government. In fact, increased household has
spending buoyed an
economy that is enjoying a run of growth that has lasted years, while other big Eurozone countries are on the edge of recession.
Portugal stays solid
Portugal, meanwhile “maintained a solid stride in the second quarter”, according to analys Focus Economics. It sees growth easing slightly next year
following this year’s expected slowdown. Private consumption is seen losing steam, while fi xed investment growth is projected to decelerate sharply, refl ecting a large base eff ect. Meanwhile, challenging external conditions will continue to weigh on exports. Industrial activity declined
again in July and bank lending fell, while business
sentiment
dipped in July–August. On the other hand, retail sales
growth jumped in July, exports rebounded slightly in the month, and consumers became less pessimistic in July–August. In the general election on 6
October, Prime Minister António Costa’s Socialist Party retained power with an increased share of the vote. This should ensure policy continuity, although the risk of a political stalemate remains if a majority is not obtained.
Ital on song in the Canaries
Manchester-headquartered forwarder Ital has increased its freight volumes over the last 12 months on all Iberian lanes, but especially to the Canary Islands, off the coast of Spain. As Ital’s partner in the islands, Best Logistics confi rms, the tourist sector is at its highest level for years, which is increasing exports, especially to Las Palmas, says Iberian and French route manager, James Mears.
During December 2018 Ital
also started a direct service to Seville, southern Spain, a territory previously supported by delivering via Madrid. Mears says: “Going direct to Seville, we have managed to cut transit times by 24- 36 hours and passed savings onto
our customers.” Ital’s partner for the area is Mold Trans Seville. Greg Wasp, previously at rival
operator DSV, joined Ital Logistics 22 months ago. On his arrival he commented: “I can’t believe how many groupage trailers you are completing to Spain – especially Barcelona.”
Ital Logistics off ers a daily
groupage service to Barcelona with hazardous and temperature- controlled services available on most departures. The main concern at present is
currency. The Euro is fl uctuating against the Pound due to Brexit. Ital managing director Phil Denton
OECD adds that the
Portuguese economy continues to recover, with past structural reforms and more favourable global economic conditions contributing to the upswing. It has been sustained by a strong export performance since 2010, but domestic demand is now also growing solidly. Employment has picked up and the unemployment rate has fallen from 17% to below 7%.
comments: “We have invested further in our FREIGHTsoſt soſt ware to cater for a no-deal scenario come the end of October. Speaking in total honesty, whilst one has to prepare, we would hope that it is a waste of money - could it be revoked?” He adds: “While many people
people are complaining about HM Revenue and Customs, if one looks closely at the procedures that are being put in place, they are actually doing a decent job, in my view at least. The only issue really is that there is such a lot to take in with little time for complete absorption. It isn’t just freight forwarders and hauliers who need to grasp the revised procedures, but also many exporters and importers who will need ‘training’. It really is going to be all about detail, dotting the Is and crossing the Ts like never before.”
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