Although growth was slow, global trade volumes continued to increase in the second quarter of 2010, largely driven by easing of the credit crunch and the rebuilding of inventories in several economies.
Trade expansion was especially notable in Asia-Pacific and Latin America. In particular, China's trade growth surged by 19 percent due to robust domestic consumption and a significant jump in industrial production. This allowed China to surpass the United States as number one in overall trade volume, according to the Capgemini Consulting Global Trade Flow Index.
The index assesses the quarterly changes in the competitive positions of the 23 countries with the highest trade volumes. The four indicators used to calculate the global trade-flow portion of the index are: total trade (imports and exports) in thousands of TEU (20-foot equivalent) containers, quarter-over-quarter trade growth, number of foreign markets for a country's goods, and domestic market size. Rankings for the top 13 nations are shown in Figure 1.
Strong recovery in China's imports and exports also bolstered throughput of its top three ports, in turn fueling rapid growth in container throughput of the world's top six ports (Figure 2).
Meanwhile, confidence in raw materials trade—fueled in part by a lift in demand in Asia-Pacific—led to a 20-percent rise in Australian exports. In the United States, trade volumes increased 5.2 percent quarter over quarter, but imports continued to outpace exports, leading to sustained trade deficits.
Exports of manufactured goods also helped fuel global trade during the second quarter of 2010. Mexico's exports rose by 5.3 percent while exports to Asia (plus further depreciation in the value of the euro) helped Germany continue to outperform the Eurozone area.
Although previous reports have drawn parallels among the BRIC countries (Brazil, Russia, India, and China), second-quarter results reflected differences between these economies' trade flows. Brazil saw steady growth in agriculture and service-sector exports. In contrast, both India and Russia saw overall contraction in trade volumes due to a drop in domestic consumption in India and weaker prices for oil and commodity exports in Russia.
We expect continued modest growth in world trade in the third quarter, but concerns over the impact of government stimulus withdrawal remain.