Business, Freight News, Logistics

World trade stands up well to shocks

[ September 16, 2022   //   ]

DHL says that global trade has proved to be surprisingly strong despite recent shocks in its latest report. The DHL Trade Growth Atlas, produced in conjunction with NYU Stern School of Business, found that international trade in goods was as much as 10% above levels before the Covid-19 pandemic. Moreover, despite the war in Ukraine, trade is projected to grow faster in 2022 and 2023 than it did over the previous decade.

The report, which covers 173 countries, also said that e-commerce sales boomed during the pandemic and forecasts point to strong cross-border e-commerce growth continuing.

The report identified new poles of trade growth in Southeast and South Asia, and it was expected to accelerate dramatically in Sub-Saharan Africa.

Trade growth is spread across a wider variety of countries: China accounted for a quarter of trade growth in recent years and is predicted to continue to have the largest growth, but its share is likely to fall by half, to 13%, said the report.

Vietnam, India, and the Philippines stand out on both speed and scale of projected trade growth through 2026. All three have potential to benefit from efforts by many companies to diversify China-centric production and sourcing strategies.

But while emerging economies increased their shares of world trade from 24 to 40 percent between 2000 and 2012, with half of the increase driven by China alone, these shares have barely changed over the past decade.

However, emerging economies continue to race forward on measures of connectivity, innovation, and leading companies. They are becoming more important exporters of sophisticated manufactured products, and increasingly compete not only on low costs, but also on innovation and quality.