Is Spain staging an export-led recovery?

Last week’s data from Spain were pretty encouraging – in particular, the PMI export orders index for August suggested that Spain’s robust export recovery continued in Q3. But other data indicate that the PMI may be overstating the likely support from the external sector. And in any case, strong export growth alone may not be enough to drag the economy out of recession. Although recent Q2 GDP data for the major non-euro-zone European economies were fairly mixed, there were positive signs that some of these economies are rebalancing away from domestic demand towards exports.