Record trade surplus not a sign of strength

February’s record-breaking euro-zone trade surplus of €12bn suggests that the external sector provided the wider economy with a boost in Q1. But we doubt that the sector is about to kick start an economic recovery. After all, much of the increase in the trade surplus over the past year reflects weak domestic demand, which has prompted imports to fall. Meanwhile, the euro-zone’s recent export performance has been poor and will continue to be depressed by weak overseas demand and the strong euro.