Slowing world trade growth – ABN AMRO
According to Han de Jong, chief economist at ABN AMRO, it seems as if a sharp deceleration of world trade growth has taken place as business surveys around the globe show a remarkable drop in export orders.
“The data on trade, indeed, shows weakening, but certainly not to the degree suggested by the confidence indices. In fact, world trade growth has only slowed moderately this year after the sharp pick-up in 2017. Digging into the eurozone data, it would appear that exports to Asia have softened, which may well reflect this slowing of world trade growth. That said, China’s overall import growth (in value terms) remains remarkably strong so far this year (around 20% yoy ytd), despite the escalation of the trade conflict with the US, although ‘front loading’ by companies trying to beat import tariffs may be boosting trade temporarily.”
“Slower trade could be a reflection of the cyclicality of the industrial sector. Industrial output growth had outpaced overall global growth in 2017. Perhaps a correction was inevitable.”