EU export growth hits two-year low

31 January 2020

Crashing into contraction: EU export growth hits two-year low

- EU export growth contracts for the first time since Q2 2017 

- UK exports remain the strongest out of Europe’s largest economies 

EU export growth plummeted to its lowest point in more than two years in Q4 2019, according to new research from accountancy and business advisory firm BDO LLP.

Sliding 3.5 points from the previous quarter to 94.7, the BDO Export Growth Index - which provides snapshots of the export markets in Europe’s five largest economies – fell below the 95-mark that separates expansion from contractionary territory for the first time since Q2 2017.

The UK recorded a 2.9 point decline in the final quarter of 2019, pulling the Index for British exports down to 97.5. However, the UK’s export growth remained the highest of the five economies analysed for a second consecutive quarter – sitting comfortably ahead of Germany (93.4), France (93.4), Italy (95.5) and Spain (95.7), the Index shows.

The weakest performing countries have been Germany and France, with the former teetering on the brink of recession and the latter facing major economic disruption associated with widespread strike action.

Germany’s export order books are now the weakest they have been in a decade. The outlook for Italian exporters is similarly gloomy, with expectations for Italy’s international trade volumes at their lowest point in almost 11 years as the country’s performance is hindered by ongoing labour productivity issues.

Spain was the only country to register a marginal increase in export growth, edging up 0.3 points in Q4 2019.

The declines are consistent with data from the International Air Transport Association, which found that air freight volumes declined for a twelfth consecutive month in October, with total freight-tonne kilometres in Europe 1.5% lower in 2019 than the same period in 2018.

Elsewhere in the report, the EU Export Inflation Index fell for the sixth consecutive quarter to 95.4. Export inflation in the UK fell by 1.7 points to 95.3 – its lowest recording since Q1 2016.

Commenting on the findings, Peter Hemington, Partner at BDO LLP, said: “Data from a range of sources point to a continued slowdown in international trade, as well as a high degree of pessimism from businesses regarding the outlook for exports in the months ahead.  

“The good news is that the UK’s export performance was resilient again last quarter, greatly outperforming its peers amongst the larger EU economies. As a timely reminder of its credibility as a trading nation, this should strengthen the UK’s hand in negotiating its ongoing relationship with the EU.”

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Overview of the BDO indices:

An overview of the Export Performance Indices are provided in the table below, detailing figures for the last four quarters, to allow for comparison.

  Country Q4 2019 Q3 Q2 Q1
(figures for this report) 2019 2019 2019
BDO Export Growth Index EU 94.7 98.2 97.8 99.7
UK 97.5 100.4 94.4 100.4
Germany 93.4 95.5 94.6 97.5
France 93.4 97.2 100.9 101.4
Spain 95.7 95.4 100.5 94
Italy 95.5 97.8 98.1 96.4
BDO Export Inflation Index EU 95.4 97 103.2 105
UK 95.3 97 98.7 101.7
Germany 93.7 95.2 99.7 102.9
France 91.8 93.7 100.4 105
Spain 92.3 93.9 97.6 105.5
Italy 102.3 99 100.2 100.1



BDO LLP operates in 17 locations across the UK, employing nearly 5,500 people offering tax, audit and assurance, and a range of advisory services. BDO LLP is the UK member firm of the BDO international network.

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The BDO global network provides business advisory services in 167 countries, with 88,000 people working out of 1,800 offices worldwide. It has revenues of $9.6bn.  

Methodological notes

The BDO Monthly Business Trends Indices are prepared on behalf of BDO LLP by the Centre for Economics and Business Research ltd., a leading independent economics consultancy. Cebr has particular strengths in all forms of macroeconomic and market forecasting for the UK and European economies and in the use of business survey techniques.

The indices are calculated by taking a weighted average of the results of the UK’s main business surveys. It incorporates the results of the quarterly CBI Industrial Trends Survey (and the CBI Monthly Trends Enquiry which is carried out in the intervening months); the Bank of England Agents’ summary of business conditions; and the Markit/CIPS Manufacturing and Services PMI data.

Taken together the surveys cover over 4,000 different respondents from companies employing approximately five million employees. The respondents cover a range of different industries and a range of different business functions. Together they make up the most representative measure of business trends available.

The surveys are weighted together by a three-stage process. First, the results of each individual survey are correlated against the relevant economic cycles for manufacturing and services. This determines the extent of the correlations between each set of survey results and the relevant timing relationships. Then the surveys are weighted together based on their scaling, on the extent of these correlations and the timing of their relationships with the relevant reference cycles. 

Finally, the weighted total is scaled into an index with 100 as the mean, the average of the past two cyclical peaks as 110 and the average of the past two cyclical troughs as 90.

The results can not only be used as indicators of turning points in the economy but also, because of their method of construction, be seen as leading indicators of the rates of inflation and growth.


Hannah Pini
PR Manager BDO
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