Lower growth in air freight brings index marginally down
Global trade continues to grow, according to the latest three-months forecast by the DHL Global Trade Barometer (GTB). The index for global trade now stands at 63 points. This is a decline of four points on the previous quarter’s forecast, indicating an overall slightly slower pace of growth.
In the GTB methodology, an index value above 50 indicates positive growth, while values below 50 indicate contraction.
Says Tim Scharwath, CEO of DHL Global Forwarding, Freight: “After months of hot conditions and bright prospects in world trade, temperatures are dropping. We are moving into more normal and cooler – but still nice – temperatures.
“Despite rising political tensions among global players over trade-related issues, the DHL Global Trade Barometer indicates solid positive growth for world trade in the coming three month.”
Mixed picture among seven countries
The overall slight reduction is largely driven by lower growth rates of air trade: The respective index value declined by eight points to 62. In contrast, the growth rate for global ocean trade merely decreased by one point to 63 points.
Regarding the GTB’s seven constituent countries, this quarter sees a mixed picture with a threefold differentiation: India as the only country with simultaneously increasing and very high prospects for trade growth, the UK with an unchanged outlook, and all other countries with slightly diminishing prospects.
India’s trade outlook improved by four points to 83, which is the highest index value of all index constituents. The improvement is driven by a ten-point increase in India’s ocean trade growth.
The UK maintaining an unchanged and positive index value of 57 comes somewhat surprising, given the tedious progress of Brexit negotiations and heightened speculations about a “hard Brexit”.
Despite intensifying global trade disputes, mainly between China and the US, these countries remain in growth mode, however, at a slower pace. US growth prospects slowed down by five points to 63.
The Chinese trade outlook decreased by four points to 59. Most other constituent countries witnessed decelerating trade dynamics, too: South Korea – still one of the previous forecast’s strongest growth drivers – saw its outlook reduced by five points to 69.
Likewise, Germany’s trade growth forecast was reduced by six points to 58. The outlook for Japan went down by three points to 64.
Read More: OECD: Global Growth Slowing