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Analysis and Studies - Country Analysis

Luxembourg: a look at the market

By SkyMinder Sales Enablement Team November 4th 2024

Luxembourg is located in western Europe, between Belgium, France, and Germany, and despite being one of the world’s smallest nations it’ also one of the wealthiest. The country’s multilingual environment—using Luxembourgish, French, and German—reflects a blend of local culture and international influences. In fact, Luxembourg’s population is diverse, with many residents originating from other nations, enriching its cultural landscape.

Historically, Luxembourg evolved from a medieval fortress to an independent constitutional monarchy, and today it is a key player in European politics, having been a founding member of both NATO and the European Union, which strengthens its influence in international diplomacy and trade. Its capital, Luxembourg City, hosts major EU institutions, cementing the country's role in continental governance.

The flag consists of three equal horizontal bands of red, white, and light blue: although it resembles the Dutch flag, it uses a lighter shade of blue and has a different proportion. The colors are inspired by the Grand Duke's coat of arms, featuring a red lion on a striped blue and white field, symbolizing Luxembourg’s historical ties and unique identity.

Luxembourg has a high level of specialization in Iron Sheet Piling ($547M), Iron Blocks ($1.61B), Polyamide Fabric ($218M), Iron Railway Products ($113M), and Sculptures ($95M).

 

 

In 2022 Luxembourg was the 78th in terms of total exports, with a trade of $20.5B. and the 76th in total imports, with a trade of $29.2B.

In 2022 the most exported product was Iron Blocks, with a trade of $1.61B, followed by Rubber Tires ($761M), Gas Turbines ($633M), Cars ($561M), and Cellulose Fibers Paper ($553M), exporting mostly to Germany (20.2%), France (15%), Belgium (10.2%), Netherlands (7.68%), and Italy (4.3%).

 

The export portfolio showcases Luxembourg’s strategic position within the EU, balancing regional trade relationships with growing global market adaptability. We can observe a strong reliance on traditional industrial sectors like iron blocks and rubber tires, primarily exported to Germany, France, and Belgium, indicating its integral role in the European manufacturing supply chain.

The export of gas turbines to Asian markets like Hong Kong and Singapore reflects a diversification into high-tech industries, while cellulose fibers paper exports to France and Germany highlight demand for sustainable materials in Europe.

  1. Iron Blocks (7.82%): 24.9% Germany, 13.3% Netherlands, 8.47% France, 7.79% Belgium, 6.23% Mexico, 4.14% Austria, 3.65% United States, 3.03% Italy, 2.57% United Kingdom, 1.15% Turkey
  2. Rubber Tires (3.71%): 25.7% Germany, 12.2% Netherlands, 5.47% Poland, 4.5% France, 4.35% Sweden, 3.85% Belgium, 3.41% United Kingdom, 2.98% South Africa, 2.55% Turkey, 2.17% Italy, 2.04% Austria, 2.01% Lithuania, 1.83% United States, 1.15% Brazil
  3. Gas Turbines (3.08%): 59.2% Hong Kong, 17.3% Singapore, 10.2% Oman,64% United Kingdom, 4.52% Netherlands
  4. Cars (2.73%): 31.2% Belgium, 27% France, 23.4% Germany, 6.49% Netherlands, 1.06% Croatia, 0.98% Oman, 0.89% Italy
  5. Cellulose Fibers Paper (2.69%): 18.1% France, 15.5% Germany, 14.3% Belgium, 9.11% Netherlands, 7.87% Italy, 7.05% United Kingdom, 6.43% Poland, 3.68% Spain, 1.56% Turkey

Whereas the most imported product was Refined Petroleum, with a trade of $2.48B, ahead of Cars ($1.96B), Electricity ($1.58B), Petroleum Gas ($908M), and Scrap Iron ($895M), importing mostly from Belgium (26.3%), Germany (25.5%), France (10.7%), Netherlands (5.99%), and United States (1.93%).

The country’s import portfolio reflects Luxembourg's interconnected trade relationships in the Benelux region and its reliance on regional partners for essential goods. The strong reliance on Belgium for refined petroleum, for example, underscores the country’s dependence on its neighbors for energy resources.

Cars and electricity also form key import categories, with Belgium and Germany serving as primary suppliers, illustrating Luxembourg's deep integration into the European automotive and energy sectors. Additionally, the significant imports of petroleum gas from Belgium and the diverse sources of scrap iron, including France and Germany, further emphasize Luxembourg's interconnected trade relationships.

  1. Refined Petroleum (8.49%): 61.8% Belgium, 15.2% Germany, 9.29% France, 4.66% Netherlands, 3.96% China, 3.18% Azerbaijan, 1.63% Brazil
  2. Cars (6.72%): 40.9% Belgium, 31.6% Germany, 4.73% France, 3.77% Czechia, 2.98% Spain, 2.25% United Kingdom, 1.12% South Korea, 0.85% Japan, 0.88% United States
  3. Electricity (5.41%): 59.4% Germany, 30.7% Belgium, 4.47% Czechia, 2.99% Bulgaria, 1.47% North Macedonia
  4. Petroleum Gas (3.11%): 78% Belgium. 16.7% Greece, 4.78% Bulgaria
  5. Scrap Iron (3.07%): 47.1% France, 41% Germany, 8.69% Belgium, 1.6% United Kingdom. 1.08% Netherlands

Between 2021 and 2022 the fastest growing exporter was Austria, with an increase of $208M, ahead of the Netherlands ($199M) and Hong Kong ($158M).

 

 

  1. Austria: from $424M to $632M
  2. Netherlands: from $1.38B to $1.58B
  3. Hong Kong: from $470M to $628M

Whereas the country with the fastest growth in imports was Belgium, with an increase of $783M, followed by Hong Kong ($199M) and the Netherlands ($190M).

 

 

  1. Belgium: from $6.88B to $7.67B
  2. Hong Kong: from $21.9M to $221M
  3. Netherlands: from $1.56B to $1.75B

Sources: 

https://oec.world/en

https://www.cia.gov/the-world-factbook/countries/