The positive outlook for world trade shows continued momentum in the first quarter despite some political trouble spots.
The DHL Global Trade Barometer increased to 66 points in March from 64 points in January when the newly created index was initially published. With an index value clearly above 50, the quarterly DHL Global Trade Barometer continues to signal solid positive growth for global trade within the next three months, according to the report, and the increase indicates that growth is gaining momentum.
The Barometer report also noted that the positive outlook is reflected in the increase in trade activity for each of the seven constituent countries–China, South Korea, Germany, India, Japan, the U.K. and U.S.
Driving the improved global index was “an increasingly positive outlook for Korean and U.S. trade,” the report noted.
“In contrast, the prospects for German trade eased after the strong peak seen in 2017,” the Barometer continued. “India continues to show the highest index value of all seven countries for the overall trade predictions, while the U.K., after a modest decline since January, scores the same level as China at the lower end of the country ranking.”
The global index for March shows an improvement for U.S. (+2 points), Chinese (+2 points) and Japanese (+1) trade compared to February. The downward trend in German trade outlook (-3 points), however, dampens the global outlook, along with a modestly reduced outlook for the U.K. (-2), South Korea (-2) and India (-2) month-to-month.
A look at ocean and air freight shows contrasting developments. The global air trade outlook fell by a slight 1 point compared to January, but remains positive at 70. Pushing the outlook for global air trade downward was German and South Korea, both dropping 6 points compared to February and are expected to continue to slow down. On the upside, air trade growth of 3 points in China and 2 points in the U.S. is expected to accelerate.
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Meanwhile, the outlook for global ocean trade improved to 63 points in March from 60 points in January. This growth was also driven by the U.S. (+3) and China (+1), along with a strong increase in South Korea, offsetting a slightly reduced growth outlook for U.K. and German ocean trade.
The U.S. and China–the world’s two largest economies–have been locked in trade threats over import levels and tariffs, but they both remain drivers of international commerce.
“Chinese air trade maintains a significantly positive outlook, picking up pace after a slight slowdown in growth anticipated in the previous month,” the Barometer said. “Machinery parts and consumer goods remain important drivers for Chinese air trade, notably for air exports out of China. Air exports of consumer fashion returned to positive territory compared to the previous index, contributing to the improved outlook for air trade in China. On the air import side, growth is expected to decelerate. While the bright outlook for capital equipment and machinery is driving growth, air imports of high technology is expected to decline in the next three months.”
Chinese ocean trade growth is expected to continue an upward trend, with industrial raw materials the largest sector of expected growth.
“The outlook of Chinese ocean exports looks promising as… all major industries like consumer goods, machinery parts and automotive are expected to show positive growth,” according to the report. “On the watchlist, however remains the ocean exports of consumer fashion, for which a continued contraction is expected in the next three months.”
For the U.S., air imports of high technology, consumer goods and fashion goods are expected to fuel the positive outlook for air trade in the next three months, while air exports growth is expected to grow at a slower pace.
“Although machinery parts are expected to continue to positively influence air export growth, this is partly offset by a decelerating growth outlook for industrial raw materials and high technology compared to the previous month,” the report noted. “Air exports of temperature or climate controlled goods are expected to contract slightly in the next three months.”
For ocean exports, basic raw materials remain the most import sector for growth, with a strong outlook.
The DHL Global Trade Barometer was developed in cooperation between DHL and IT service provider Accenture.