DHL launches Global Trade Barometer, calls for 3 more months of trade growth

Few logistics companies have access to the volume of trade data that DHL commands on a daily basis. Starting this year, the global integrator is crunching that data into its just-released “Global Trade Barometer,” a quarterly measure of economic growth based on import and export data for a number of intermediate and early-cycle commodities that serve as the basis for further industrial production.

There isn’t an official report at this stage, but the forecast calls for continued growth in global trade over the next three months. On its initial release last week, the index scored 64 out of a hundred, which is “slightly below the values calculated for previous months.” Scores over 50 are positive.

On the airfreight side, the barometer measured a two-point drop in confidence (still measuring a healthy 71/100) compared to last month, which was mainly caused by a drop in U.S. and German air trade.

The report said that, “world trade is still considered to be in an expansive mode, but growth is losing momentum. The decline is due to weakening prospects for Chinese and Japanese trade, which is only partially offset by improved prospects for India, South Korea and Great Britain.”

“DHL has both a deep understanding of the driving forces behind global trade volumes and the industry expertise to analyze and interpret market data,” said DHL’s CEO of DHL Global Forwarding, Tim Scharwath. “Our network, knowledge and experience uniquely position us to understand global supply chains in order to derive a global trade outlook.”

Predicting global economic trends is challenging, at best. Legendary Canadian economist and diplomat John Kenneth Galbraith once quipped that, “the only function of economic forecasting is to make astrology look respectable,” underscoring how complex these sorts of analyses are. The Economist noted that, “since economic output represents the aggregated activity of billions of people, influenced by forces seen and unseen, it is a wonder forecasters ever get it right.”

DHL says that it’s analysis overcomes much of that predictive uncertainty by processing millions of data points, generated on a daily basis, with its advanced big-data and predictive analytics. The Global Trade Barometer crunches import and export data for commodities such as brand labels for clothes, bumpers for cars or touch screens for mobile devices that have historically indicated future economic movements.

DHL said the reasoning behind the barometer forecast is that by focusing on components and other input items with a leading quality, and on companies with global manufacturing and supply chains, they can get a pretty clear picture of how optimistic those same companies are about their prospects. It’s not a flawless method, but it accounts for the aggregated outlook of the multinationals that drive global trade – representing 150 verticals – predicted through 1.6 million potential commodity indicators.

The barometer aggregates data from air and containerized ocean freight in seven countries, which account for more than 75 percent of world trade. DHL said that, “using artificial intelligence and various statistical methods this data is compressed to a single index value, which is published on a global level and individually for the seven countries evaluated.”