The latest DHL Global Trade Barometer (GTB) indicates that global trade will continue to grow over the next three months, but at a slower pace, particularly in Asia.
With an overall index of 61 points, the GTB, released late last month, shows the continued growth of international air and containerized ocean trade flows seen in the previous quarters. The report said indices for all seven countries that constitute the GTB index—China, Germany, India, Japan, South Korea, United Kingdom, and the United States—are above 50 points, which corresponds to a positive growth forecast.
“The pace of growth, however, is further slowing in all index countries,” it added. This deceleration will be particularly strong in Asia (except for China), as the index values for India, Japan, and South Korea have dropped by eight, six, and five points, respectively, compared to the previous release of the GTB in September.
With an overall index of 75 points, India, however, continues to be the country with the strongest trade growth forecast.
“The DHL Global Trade Barometer clearly shows that the state of global trade remains solid. Both, air and ocean trade, continue to grow around the world,” said Tim Scharwath, CEO of DHL Global Forwarding, Freight.
“However, given the smoldering trade conflicts, especially between the US and China, and economists’ expectations that the global economy could cool down, it is not entirely surprising that trade momentum has weakened slightly,” he added.
“Trade growth in the US (61 points) and China (58 points) remains solid. Both countries’ momentum of growth is slowing only moderately by two and one points, respectively—even though both countries would have much to lose if their trade conflict escalated.”
With a two-point decline and an index value of 56 points, Germany’s loss of trade growth momentum turns out to be moderate, too, compared to September.
While the UK was able to keep its GTB index unchanged in the previous release, its growth forecast has now deteriorated noticeably by four points. This makes it the index country with the weakest growth forecast: With 53 points, the UK is only slightly above the 50-point mark, which indicates stagnation in trade growth.
The worldwide deceleration of trade growth is attributable to declines in both containerized ocean freight and international air trade—with last year being a peak year with exceptionally high volumes.
South Korea is the only country whose growth forecast for ocean trade remains unchanged. In all the other countries, the outlook for ocean trade is declining.
Furthermore, the air trade outlook is going down in every index country. Looking at the individual sectors, industrial raw materials contributed most to international trade growth, followed by machine parts and basic raw materials. The weakest growing categories were consumer & household goods, capital equipment and machinery parts.
Launched in January 2018, the DHL Global Trade Barometer is an early indicator for the current state and future development of global trade. Developed by DHL and Accenture, it is published four times a year.
Photo: Infrogmation of New Orleans