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AT
first glance the lack-lustre trade figures
don't show it, but with an eye to what is
happening to oil and exchange rates much
more becomes clear - things don't look nearly
so bad for Africa and the Mediterranean.
The
big news is the impact of strong US dollar
and its power of to create a worldwide export
boom in US imports. The euro is in pretty
good shape too; even the EU economy is not
as bad as some make out.
Also
note that US imports from Asia are not impressive.
The American appetite for Chinese goods
has waned lately, perhaps a function of
a strong yuan and diversification of sourcing.
But
US import performance by numbers alone is
far from convincing. That's because it is
muddied by the influence of the energy sector.
Even so, there is enough to suggest that
US strength is spreading, and will continue
to do so if overall growth heads up this
year.
And
that is good news for exporters from Africa
and around the Mediterranean basin if they
only twig to the opportunity that beckons.
If there's a lament in this story, it's
that the rest of the world isn't catching
on.
America
is displaying strong domestic demand growth.
This is stoking import demand from the rest
of the world, and is being further encouraged
by a strong dollar, and it is a spreading
trend showing positive signs of growth.
What
masks this positive situation, in the eyes
of Peter Hall, vice president and chief
economist for Export Development Canada,
the Canadian trade credit agency, is the
seemingly "new normal" of low
oil.
Overall
trade numbers are being depressed by a poor
showing on the energy front. Normally this
would be a key signal of weakness: a faltering
industrial production machine that needs
less energy imports from the rest of the
world, says Mr Hall.
But
this time around, the conventional reason
does not apply. Instead it is crashing world
energy prices and much higher US domestic
production.
The
plunge in oil prices worldwide has skewed
overall trade figures concealing the good
news under a heap. Mr Hall notes this situation
in Canada were expensive Alberta oil sands
production has been cut as the price of
oil fell 50 per cent of what it was at a
time when cost of producing it becomes far
more important than it ever was.
Strip
oil production away from exports and the
situation changes completely. It is a situation
in which American exports may be hurt, but
one in which imports will thrive.
In
December, US food and beverage imports were
up 5.7 per cent year on year in inflation-adjusted
terms. Auto sector imports posted an 8.8
per cent gain. Imports of consumer and other
goods are volatile, but ended the year up
2.5 per cent.
If
there's a global crisis in the works, somebody
didn't tell US consumers. The media has
tried, but it seems even that persuasive
voice can't buck fundamentals.
Low
petrol prices have suppressed overall sales,
but peel away that effect and control for
other volatile categories, and January sales
put first-quarter consumer spending on track
for a four per cent gain.
At
the same time, December was revised up.
Put that together with a housing sector
that's on the up and up and an industrial
sector that's running thin on capacity,
and the world's top economy isn't looking
so bad. This is boosting US imports from
the rest of the world.
US
imports were on a roll a year ago. Annualised
growth was 10 per cent to close off 2014,
and seven per cent more was added in the
first three months of 2015.
>From
there, things decelerated, but the good
news was that those surges in activity were
sustained. Things tailed off at the end
of last year, along with disappointing GDP
growth.
But
the recent resumption of spending growth
strongly suggests an upside that is being
discounted by many market experts on account
of the financial market turbulence that
has gripped the world in the opening weeks
of 2016.
Most
economy-watchers acknowledge US strength,
albeit to different degrees. The most pessimistic
forecaster sees 1.8 per cent growth this
year, but the consensus is calling for 2.2
per cent growth.
Consumption
is out ahead of this, and business investment,
at four per cent by 2017, is the growth
leader.
A
key gainer is the auto sector, and consumer
goods are on a great roll, too. We're not
the only ones in this predicament: Mexico
is seeing its numbers do the same. Pan across
the pond, and Western Europe has its own
positive story to tell. Things are on the
up-and-up in Germany after a choppy start
to last year. Italy's growth run seems even
more entrenched.
Not
all are on the same path, but it's just
possible that imports by the US are part
of the reason the EU has been collectively
growing its GDP ahead of long-term average
growth for five successive quarters.
All
this bodes well for export growth in Africa
and the Mediterranean. There are things
the can be produced from Kenyan flowers
to specialty foods from Israel, Egypt, Greece,
Italy, Spain and Tunisia not to mention
west and south of Sub-Saharan Africa which
will find ready markets in the US and Euro
zone. But it will take initiative and some
get up and go.
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