British trade remains positive despite Brexit: DHL Global Trade Barometer
British trade remains positive regardless of ongoing Brexit discussion, indicating a weak growth but no decline in international trade says DHL Global Trade Barometer.
Launched in January 2018, the DHL Global Trade Barometer is an indicator for the current state and future development of global trade. It is based on large amounts of logistics data that are evaluated with the help of artificial intelligence. The barometer’s scoring threshold is 50 points which mark the line between positive and negative growth in the GTB methodology. This means that scoring 50 points and above represents growth.
According to the latest three-month, the forecasts by the DHL Global Trade Barometer (GTB) trade in the UK remains at a positive level of 54 points, representing a slight growth in the market. However, DHL explains this development is likely to be driven by re-stocking of goods in the run-up to Brexit.
When it comes to territories outside of the UK, Germany’s trade index has improved by +2 points, reaching 53 points. The foreseen moderate growth for Germany is mainly based on the forecast for German air freight exports which are up +9 points. DHL says that the trend is most likely due to the growing transatlantic trade.
Despite the trade tensions between the US and China, the outlook for Chinese trade decreased only minimally by -1 to 56 points. This indicates only small trade growth but no feared downturn. The US however has a decline of -5 to 55 points. This puts them roughly on a par with China in terms of predicted trade growth for the next three months.
“Global trade has grown remarkably in recent years. While we are witnessing an ongoing slowdown of this growth momentum, the current DHL Global Trade Barometer still shows trade activity will remain positive over the next three months. Thus, the index does not reflect the dominant negative public sentiment with respect to international trade – at least not in the short-term.”
-Tim Scharwath, CEO of Global Forwarding, Freight, DHL
A broad-based decline in trade prospects
The weaker global average outlook is driven by reduced growth rates in both, air and ocean trade. The respective global index value for air trade has declined by -4 to 55 points. The growth rate for global ocean trade has decreased by -5 to 56 points.
The overall reduction of expected trade growth is also reflected by the country-specific scores: Only Germany’s and the UK’s overall trade indexes have improved slightly by +2 points.
“The DHL Global Trade Barometer paints a picture of positive but weakening global trade growth. This is consistent with eroding growth momentum in the major advanced and emerging market economies. Global trade flows are also being dampened by ongoing trade tensions and geopolitical uncertainties, which in turn are hurting business and consumer sentiment. These developments could adversely impact consumer demand for durable goods and business investment in physical capital, and also prompt a re-evaluation of the structure of international supply chains. All of these factors – which are reflected in the overall, country, and sectoral indexes of the Global Trade Barometer – add up to a softened positive short-term outlook and carry the risk of further deteriorating prospects for world trade.”
– Professor Prasad