The import content of the industrial sectors in Spain

During the last economic upturn the Spanish economy posted a sizable deficit on its balance of goods and services. Some of this deficit has been corrected during the recent economic crisis, as a result of the contractionary impact of the decline in national demand on imports and of some improvement in competitiveness. However, the persistence, even in these circumstances, of the external deficit suggests the presence of structural obstacles to adjustment, including shortcomings in the workings of goods and factor markets. Moreover, the imbalances built up during the expansionary phase prior to 2007 and, in particular, the excessive growth of construction have highlighted the need for the productive model to be underpinned by a broader and more competitive export base, not giving rise to such intensive resort to imports. The aim of this article is to identify some of the distinguishing features of our economy from the prism of the industrial sectors, emphasising their dependence on imports. The findings for Spain are compared with those of the three biggest euro area economies (Germany, France and Italy). In this connection, information is taken from the input-output tables (IOTs) in the European System of Accounts (ESA 1995), taking as sources the OECD (Structural Analysis Databases) and Eurostat, down to an extensive level of detail (a breakdown of 40 productive sectors). The analysis is conducted in nominal terms, since the information contained in the IOTs is at current prices, advising caution when assessing the results obtained.2 It should further be borne in mind that the latest IOTs reflect the productive structure for 2007, whereby the analysis conducted in this article does not envisage the changes that may have taken place since then, which is another reason for caution when interpreting the results. The article is structured as follows. After this introduction, the second section gives a descriptive view of the economy’s structure from the supply side. Drawing on the main conclusions of this analysis, the third section introduces the concept of import content, which refers to the proportion of output value that relates to imported intermediate inputs. This indicator has a comparatively higher level in our country, helping explain why the characteristics of the Spanish productive model contribute to the persistence of the trade deficit. The fourth section builds on this exercise, setting out an analysis that shows that import content is also higher in Spain in terms of final demand components. Lastly, the fifth section draws together the main conclusions of the article.