Concern about the future of global trade has dominated headlines around the world in recent weeks, driven by talk of a U.S.-China trade war. But while the news certainly merits close attention, a more analytical review of the overall global trade situation suggests some very real positive signs. Beyond the initial, more emotional reaction that accompanies any discussion of tariffs, data suggest that international trade growth will continue in the coming months on a worldwide basis.
The most recent DHL Global Trade Barometer (GTB), for instance, predicts an acceleration in trade during the third quarter of 2018. Created in cooperation with Accenture, a Fortune 500 management consulting company, the GTB is a quarterly measure of the current state and future development of global trade that analyzes import and export data for intermediate and early-cycle commodities, which serve as the basis for further industrial production, e.g. brand labels for clothes, bumpers for cars or touch screens for mobile devices. The aggregated market data from air and containerized ocean freight come from seven countries, which together account for 75 percent of world trade. The index countries are the United States, Germany, India, Japan, China, Great Britain and South Korea.
What does the barometer tell us? Compared with the previous release in March 2018, the overall GTB index rose by one point, to 67. An index value above 50 signals a positive growth forecast. The bottom line is that the data indicate no impact from current international trade disputes. Instead, recent trade expansion and increasing demand suggest continued acceleration in cross-border activity. Outlooks for growth are most optimistic in China and South Korea, with the United States also seeing a slightly improved trade forecast.
If your company is considering launching or expanding an international trade strategy, the analysis suggests that third quarter 2018 should be strong, depending upon your industry and your target markets. The outlook for businesses that deal in machinery parts and components improved the most in the GTB, for instance, followed by consumer goods and high-tech products. Ultimately, all industries included in the barometer continue to have a positive outlook, with the exception of basic raw materials.
Your business’s decision to go global should be based on a range of factors and comprehensive research. These include understanding current trade trends, your company’s readiness to compete globally and the specific border clearance challenges that your products may face. Global e-commerce is continuing to see tremendous gains, and organizations of all sizes that want to access new audiences online across the world should continue to explore their global trade options. Numerous resources are available to help you refine your global strategy, including the International Trade Administration’s export.gov site and the DHL Go Global site.
Does your company plan to increase global trade activity this quarter? Let us know on Twitter @DHLUS.