Four years after the onset of the global financial crisis, economies remain fragile. The European debt crisis, fiscal issues in the United States, dwindling foreign investment in China, and potential oil supply disruptions could all derail a delicate recovery.

Nevertheless, container throughput is expected to gain momentum in Q1/2013, as countries ramp up their efforts to prevent an economic slowdown. Global trade flow in Q1 is estimated to rise by 1.5 percent, largely because of an accelerated expansion in Q4/2012 of the manufacturing sector in emerging markets. Producers in those markets posted the fastest growth in new orders since Q2/2011, as the rising cost of doing business in China and Brazil caused some production to shift their way. Consequently, China will experience stagnant quarter-to-quarter gross domestic product (GDP) growth as foreign investors withdraw their funds amid a cautious outlook. In Japan, meanwhile, declining wages contributed to stagnant consumer spending and deflation of the yen.

Article Figures

[Figure 1] CapGemini Consulting global trade flow index Enlarge this image

[Figure 2] Container throughput vs. growth in trade Enlarge this image

After demonstrating resilience for the past 18 months, the U.S. GDP unexpectedly fell 0.1 percent in Q4/2012. Despite this setback, the U.S. is expected to see a 3.1 percent uptick in total trade and 0.6 percent GDP growth in Q1/2013, even as macroeconomic woes weigh on the pace of recovery. Sluggish employment growth, declining laborforce participation, and shrinking real incomes could drag the economy back into a recession in 2013.

Despite the lingering threat of a European debt crisis, inflation, and an oil price hike, world trade is expected to grow in Q2/2013. Without decisive actions by European policymakers, however, the European crisis could hinder trading among EU countries and threaten the recovery of other international economies. Lack of progress in Europe and the U.S. could trigger increased sovereign borrowing costs in the U.S. and Japan, as well as turbulence in the global bond and currency markets. Multinational companies must proactively manage their supply chains to mitigate risks and protect margins, as corporate profit continues to be pressured by macroeconomic risks.

For more about Capgemini Consulting's trade information services, contact Dan Albright, Vice President, Cathy Chinich, Senior Consultant, or Phil Liu, Consultant.