DHL global trade barometer suggests softening of trade flows

The DHL Global Trade Barometer suggests a slight contraction of global trade for the next three months. The barometer showed an overall drop in the world trade outlook by minus eight points, with the barometer at 48.

The DHL barometer suggests a mild drop in global trade in the coming months. This decline was driven by major losses for air and containerised-ocean trade, two of the Global Trade Barometer’s main constituents. Air trade contracted by minus six to 49, while containerised-ocean trade by minus eight to 48.

The trend matches a general downward trend that has been recorded on the barometer for several quarters since mid-2018.

Commenting on the latest forecast, Tim Scharwath, CEO of DHL Global Forwarding, Freight, said: “Amidst rising US-Chinese tensions, the slightly negative outlook for global trade for the third quarter of 2019 does not come as a complete surprise. The latest GTB clearly illustrates why trade disputes create no winners. Nevertheless, some major economies such as Germany continue to record positive trade growth. And from a year-to-date perspective, world trade growth has still been positive. Hence, we remain confident in our initial prognosis that 2019 will be a year with overall positive, but slower trade growth.” With respect to the implications for Deutsche Post DHL Group, Tim Scharwath further explained: “The GTB is a useful tool for us to anticipate economic developments at an early stage. We are well-prepared to tackle the forecasted developments. Our divisional structure and portfolio as well as our worldwide activities allow us to balance economic effects within the company and remain resilient to changes in global trade dynamics.”

Eswar S. Prasad, Professor of Trade Policy and Economics at Cornell University in Ithaca, NY, USA, comments: “Growth is weakening in the key drivers of the world economy. Most macroeconomic and labor market indicators point to a cooling of U.S. growth and financial market sentiment has been hurt by trade tensions. The Chinese government’s stimulus measures appeared to be stabilizing growth, but persistent trade tensions are again dragging down growth momentum in China. The German growth revival looks fragile while India’s growth has hit the skids, with rising doubts about the prospects of major economic reforms. A synchronized slowdown of the world’s major economies could affect trade volumes, if the uncertainty continues to dampen consumer demand and business investment.” 

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