DHL's global trade barometer drops down to 47 into negative zone
The DHL Global Trade Barometer (GTB) has fallen by one point overall to 47, indicating slightly negative growth
The DHL Global Trade Barometer (GTB) has fallen by one point overall to 47, indicating slightly negative growth. The decrease was attributed to global air trade that shed four points to 45. On the other hand, the index for global ocean trade held steady at 48.
DHL GTB forecasts global trade will further lose momentum over the next three months. In June, the GTB index registered a loss of eight points. The deceleration is spreading across GTB countries with five out of the seven in negative territory.
The GTB anticipates a positive growth momentum for the next three months (53 points) for only Japan and the UK. Due to the ongoing Brexit uncertainty, both air and ocean trade in the UK decreased, following the cooling of several industry sectors, particularly consumer fashion goods, industrial raw materials, and land vehicles and parts, Mumbai's STAT Trade Times reported.
Japanese trade, on contrary, seems to accelerate growth with an increase of three points since June. This positive development is driven by the rejuvenated ocean trade in Japan picking up six points to 55, due to the robust growth outlook for industrial raw materials and the correspondingly lifted ocean export outlook.
'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,' said Cornell University economics professotr Eswar Prasad.
The GTB shows little deviation between the seven constituent economies. All country indexes settled 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.
It is expected that US trade will shrink further, remaining in negative territory with 45 points, despite having risen by one point since June. Both, US air and ocean trade prospects are almost unchanged compared to June. For Chinese trade, the GTB forecasts a moderate decline of four points to 45, mainly due to the weak performance of Chinese air trade which has dropped by eight points to 43 over the past three months.
Apart from the US 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 with 48 and 49 points, respectively.