On a country level, the GTB (Global Trade Barometer) shows little deviation between the seven constituent economies as well as in comparison to the previous update in June.
All country indexes settle close to 50 points, which is the threshold for growth. Five out of seven countries show slightly negative growth indicators, recording indexes right below 50.
“China-U.S. trade tensions have ratcheted up to higher levels and are already affecting global supply chains as businesses adjust to the new reality that both sides are digging in for a long trade war. Rising trade tensions in other parts of the world, including between Japan and Korea, and the looming prospect of a messy Brexit are likely to have an increasingly disruptive effect on world trade volumes.”
Eswar S. Prasad, Professor of Trade Policy and Economics at Cornell University in Ithaca
The U.K. and Japan Show Positive Growth
Only for the U.K. and Japan, the Barometer forecasts a positive growth momentum for the next three months (53 points).
The quarter-to-quarter comparison illustrates that both countries reveal see-saw positions, with Japanese trade coming from a negative to a positive index and U.K. declining by -3 points since June.
Due to the persisting Brexit uncertainty both, air and ocean trade in the UK dropped, following a cooldown of several industry sectors, particularly Consumer Fashion Goods, Industrial Raw Materials and Land Vehicles & Parts.
Japanese trade, on the contrary, seems to accelerate growth with a rise of +3 points since the previous update in June.
This positive development is driven by the rejuvenated ocean trade in Japan picking up +6 points to 55, due to the robust growth outlook for Industrial Raw Materials and the correspondingly lifted ocean export outlook.
Apart from that, even for Japan, the quarter was rather sluggish as all other industries are expected to contract.
Impact of U.S.-Chinese Tensions Reflected in Their Own Results
The trade conflict between China and the U.S keeps simmering, resulting in an overall subdued trade mood, with the U.S and China accounting for the most negative trade outlooks in September.
It is expected that U.S. trade will shrink further, remaining in negative territory with 45 points, despite having climbed +1 point since June.
Both, U.S. air and ocean trade prospects are almost unchanged compared to the previous update. For Chinese trade, the GTB forecasts a moderate decline by – 4 points to 45.
The main driver of this development is the weak performance of Chinese air trade which has dropped significantly by -8 points to 43 over the past three months.
Apart from the U.S. and China, South Korea is the third country with an overall outlook of only 45 index points. The remaining two countries, Germany and India, both fell below the 50-points-threshold, with 48 and 49 points, respectively.
“Worldwide, trade conflicts continue to smolder. Geopolitical tensions are causing uncertainty. Against this backdrop, global trade continues to develop surprisingly well. Although the DHL Global Trade Barometer has further decreased – with an index value of 47 points – world trade is still closer to staying at its high level.”
Tim Scharwath, CEO of DHL Global Forwarding, Freight
The next GTB update will be released End of November 2019.
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