Showing all posts tagged #global:


Global trade volumes in January/2016

Posted on March 24th, 2016

Main takeaways:

  • World trade volumes resilient, despite risk-off in financial markets.
  • World trade volumes growing at around 1.8% per year, but with sharp contrast between advanced and emerging economies.
  • Advanced economies imports growing at a strong pace, but growth might have slowed a bit in recent months.
  • Trade volumes in emerging economies, on the other hand, are flat (but with some tentative sign of improvement in imports).

The Netherlands Bureau for Economic Analysis (CPB - Centraal Planbureau) has released world trade volume and industrial production data for January.

World trade prices (exports and imports) dropped materially since mid-2014, in tandem with oil prices. Trade prices fell by 45 % for advanced economies (AE), 60% for emerging economies, while oil prices dropped 120% in the same period ! (welcome to log % changes !!)

This has confused some pundits that often mention the collapse in global trade growth looking only at nominal (or current US$) trade performance. Looking at trade volumes one reaches a different conclusion (more on this below).


The overall drop in trade prices for both emerging and advanced economies masks an important difference: the regions faced opposite terms of trade shocks in recent years. Advanced economies are facing improving terms of trade, while EM economies are facing a declining terms of trade (but with a tentative sign of a rebound, see charts).



Advanced Economies
Looking at trade volumes, one can see that demand (imports) from advanced economies picked up late 2013 and is growing at a healthy 3.5% pace, but might have slowed a bit more recently.


Emerging Economies
Emerging economies show a completely different picture. Both export and import volumes have been relatively flat since mid-2014. More recently, imports are tentatively rebounding, but exports remain lackluster.



World
The consolidated world trade statistics show a puzzling divergence: consolidated imports (of which EM account for one-third) is growing at a healthy pace, while consolidated exports (of which EM account for 40%) are roughly flat. Growth of average trade volume is at 1% yoy, with imports growing at 2%yoy and exports flat.





Global industrial production and trade resilient despite tightening of financial conditions

Posted on February 26th, 2016

Main takeaways:

  • World trade volumes resilient, despite risk-off in financial markets.
  • World trade volumes growing at around 2.5% per year.
  • Global industrial production growing at 1%, but the recent slowdown in growth is due to US; ex. US, global IP is growing at 1.5%-2%.

The Netherlands Bureau for Economic Analysis (CPB - Centraal Planbureau) has released world trade volume and industrial production data for December.

Chart 1a) Volume of world trade (exports & imports, seasonally adjusted)


Chart 1b) Volume of world trade (seasonally adjusted)


The charts below zoom in to the most recent four years to highlight the behavior of trade volumes at margin.
Export trend growth in the last two years slowed from 2.4% to 2.1% (from July to September) but rose to 3.7% in December.
Import trend growth slowed from 1.8% to 1.6% (from July to September) but moved up to 2.2% in December.

Chart 2a) Volume of world exports (seasonally adjusted, last 4 years)


Chart 2b) Volume of world imports (seasonally adjusted, last 4 years)


Chart 2c) Volume of world imports ex ASIA (seasonally adjusted, last 4 years)


Chart 3a) World Industrial Production (seasonally adjusted)


Chart 3b) World Industrial Production ex US (seasonally adjusted)


Chart 3b) World Industrial Production (seasonally adjusted)




World trade volumes remain sluggish

Posted on November 25th, 2015

Main takeaways:

  • World trade volumes rebounded after the slowdown earlier in the year.
  • But volumes are flat compared to last year.

The Netherlands Bureau for Economic Analysis (CPB - Centraal Planbureau) has released world trade volume data for September.

The charts below shows world trade volumes picking up a bit since the first quarter contraction, but the overall message is still of a very sluggish trade.

Chart 1a) Volume of world trade (exports & imports, seasonally adjusted)


Chart 1b) Volume of world trade (seasonally adjusted)


The charts below zoom in to the most recent four years to highlight the behavior of trade volumes at margin. Export trend growth in the last two years slowed from 2.4% to 2.1% (from July to September), while import trend growth slowed from 1.8% to 1.6% in the same comparison.

Chart 2a) Volume of world exports (seasonally adjusted, last 4 years)


Chart 2b) Volume of world imports (seasonally adjusted, last 4 years)


The breakdown by country/region show that export volumes from the Euro Area have been very resilient while export volumes fell in the other regions. Imports have rebounded in most regions in recent months.

Chart 3a) Export volumes by country / region (seasonally adjusted)


Chart 4b) Import volumes by country (seasonally adjusted)



Global industrial trends

Posted on November 6th, 2015

Main takeaways:
  • Global PMI continues ticked up in both developed and emerging countries.
  • But there is a clear divergence on what the PMIs suggest:
    • Developed countries industrial production growth likely to move sideways at a low pace of growth
    • Emerging countries IP growth likely to slowdown further.


Global PMI ticked up in October...

... and it was an across the board increase; but emerging markets continue to under-perform its developed peers.

This suggests industrial production in developed economies should continue to grow at just above 1%...

...while industrial production growth in EM economies should slowdown further in the coming months.

And within emerging countries, the slowdown in industrial activity is driven by Asia (China), but it rebounded a bit in October.

The EM and DM PMIs suggest a convergence of growth between the regions is likely to continue...

... and as a result global industrial production growth is likely to slowdown. The chart below shows that world industrial production is usually cyclical -- except in the unusual expansion period between Dec/2001 and Feb/2008 and in the last 4 years up to mid-2014.

The previous slowdown / contraction periods (Dec/94 to Dec/95, Oct/97 to Oct/98, Aug/2000 to Dec/01, Feb/08 to Mar/09) were all period of crisis (Mexico, Asia, Nasdaq, and the GFR) and lasted about one year. The current slowdown is shallower but is also about one year old.




Global industrial trends

Posted on October 1st, 2015

Main takeaways:
  • Global PMI continues trending down.
  • But there is a clear divergence between emerging and developed countries...
  • ...that suggests convergence of growth between the regions is likely to continue...
  • ...resulting in a slowdown in global industrial production growth compared to pre-crisis growth pace.


Global PMI continues trending down...

... with a clear divergence between developed and emerging markets happening in the last 6-7 months.

This suggests industrial production in developed economies should continue to grow at around 1%...

...while industrial production growth in EM economies should slowdown further in the coming months.

And within emerging countries, the slowdown in industrial activity is driven by Asia (China)

The EM and DM PMIs suggest a convergence of growth between the regions is likely to continue...


... and as a result global industrial production growth is likely to slowdown. The chart below shows that world industrial production is usually cyclical -- except in the unusual expansion period between Dec/2001 and Feb/2008 and in the last 4 years up to mid-2014.
The previous slowdown / contraction periods (Dec/94 to Dec/95, Oct/97 to Oct/98, Aug/2000 to Dec/01, Feb/08 to Mar/09) were all period of crisis (Mexico, Asia, Nasdaq, and the GFR) and lasted about one year.




Paulo Gustavo Grahl, CFA

Random comments on macro data. Views are my own. Except when they aren't.