Most Read Articles
Global Trade and Container Flow Index: China slows down global trade
Slowing growth in emerging markets—especially China—offset gradual economic improvements in advanced countries in the third quarter. The total trade picture was decidedly negative, with both imports and exports decreasing. Despite that decline, containerized transportation managed a slight gain.
The advanced economies and India helped to support global gross domestic product (GDP) growth rates. The Economist Intelligence Unit forecasts that the U.S. economy will post average real GDP growth of 2.5 percent in 2016-2018, after expanding by 2.1 percent in Q3. Past gains were supported by private consumption and investments, which should continue as unemployment (5.1 percent), energy prices, and interest rates hover near multiyear lows. Meanwhile, Europe's consumer-driven economic progress (0.5 percent quarter-on-quarter GDP growth) continued unabated despite political events in Greece that unsettled financial markets.
[Figure 1] Container throughput vs. total trade Enlarge this image
[Figure 2] Capgemini Consulting Global Trade Flow Index Enlarge this image
India is among the few emerging economies expected to improve over the near term. However, its ability to achieve double-digit growth will depend on successful government reforms of land acquisitions and service taxes. Other emerging markets continued their rapid decline. Russia's economy plunged 4.6 percent into a deep recession brought on by an overreliance on the energy sector, international sanctions, and geopolitical factors. Meanwhile, Brazil's economy remains depressed as it struggles with a 2.7 percent decline in private consumption and interest rates near a nine-year high of 14.3 percent. China's size and place at the center of global supply chains means its 17.6 percent plunge in imports and 2.5 percent drop in exports year over year had the biggest impact on total trade and container flows worldwide.
Global container throughput should grow by roughly 1.1 percent in Q3, the slowest rate in two years (see Figure 1). Due to declines in emerging market growth, expect total trade to fall by about 2.8 percent in Q3. Volatile container growth will continue as economic growth bifurcates between advanced and developing economies.
Join the Discussion
After you comment, click Post. If you're not already logged in, you will be asked to log in or register.
We Want to Hear From You! We invite you to share your thoughts and opinions about this article by sending an e-mail to ?Subject=Letter to the Editor: Quarter 2015: Global Trade and Container Flow Index: China slows down global trade"> . We will publish selected readers' comments in future issues of CSCMP's Supply Chain Quarterly. Correspondence may be edited for clarity or for length.