Over the past few months the global economy has encountered increasingly strong headwinds that have set back world trade and economic growth. Although the Chinese and U.S. economies experienced positive trade growth during Q2/2013, continuing shocks from the eurozone continue to dampen overall global economic growth.
Global container throughput growth (Figure 1) remains positive and is expected to increase further in Q3. Global trade is estimated to have dropped slightly in Q2 (down .3 percent from Q1), to US $2,168 billion. That decline was due to negative global output and unemployment trends, higher governmental taxes within the United States, and continuing shocks and lackluster export performances emanating from the eurozone.
Within the eurozone, Germany and Netherlands improved their gross domestic product (GDP) in Q2 through private consumption and investment in construction, both aimed at increasing business and consumer morale.
China, the United States, and Japan continued to drive the modest global economic growth seen in Q2 (Figure 2). Slowly improving employment, a recovering housing market, and rising consumer wealth suggest the United States is accelerating economic growth. When the numbers for Q2 are all in, U.S. GDP and total trade are expected to grow by 1.6 percent and 2.7 percent, respectively.
A rise in government-funded investment helped strengthen China's Q2 exports to Europe by 4.3 percent. This has led to increased industrial production compared to Q1 as well as GDP growth of 2.4 percent. Meanwhile, Japan continues to undergo recovery reforms. The economy has been sluggish, but recent government projections predict total trade will grow by 2.7 percent in Q2, thereby increasing the GDP by 0.6 percent.
A recession of European origins could wash back into the strongest economies of the world. That concern is leading the strongest economies to take steps to depend less on export-led growth and more on consumer-led growth.