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World trade rides out Trump tariff fears

[ June 28, 2018   //   ]

Global trade has proved resilient and is expected to accelerate in the third quarter of 2018, despite rising trade tensions, said DHL’s latest Global Trade Barometer (GTB), published on 28 June.

However, it found that the UK has the least optimistic outlook of all countries included in the barometer, with trade dropping since March. This is attributed to a drop in UK air imports and exports of temperature controlled goods like fresh food, as well as lower UK ocean imports of raw materials.

The UK automotive industry is though expected to see positive growth over the next three months and the Barometer forecasts a rise in ocean exports of vehicles such as cars and their component parts.

Globally, the optimistic outlook was driven by improved prospects for trade with China and South Korea.

Compared to the previous release in March, the overall GTB index rose by one point, now standing at 67 points. According to the GTB methodology, an index value above 50 signals a positive growth forecast and there has been no impact from current international trade disputes.

The rise in the overall index was primarily driven by a slight increase for containerised ocean freight, while global air trade remained unchanged.

The improvement was mainly driven by more optimistic outlooks for China and South Korea, but the forecast for the US has also improved slightly.

This was partially offset by reduced outlooks for the UK, India and Japan although, despite a decline of 5 points in its outlook, India still has the highest forecast for overall trade growth with 79 points.

In contrast, the UK has the least favorable outlook with now 57 index points, down 4 points compared to March.

Germany remains somewhat in between: a significant increase in air trade by 3 points is offset by a 1 point decline ocean trade. This amounts to an unchanged overall forecast for Germany – which is still markedly positive with an index value of 64.

For individual industries, the outlook for machinery parts and components improved most, followed by consumer goods and high tech. Moreover, all industries included continue to have a positive trade outlook, except basic raw materials, for which the GTB predicts a significant decline in global trade.

Launched in January 2018, the four-times-a-year DHL Global Trade Barometer is an early indicator for the current state and future development of global trade developed by DHL and IT service provider Accenture. The next release date is September 26, 2018.

 

 

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