In spite of the chill wind blowing from the ongoing U.S.-China trade war and recent tariff escalations, the latest reports from DHL’s Global Trade Barometer index shows that world trade will continue to grow over the next three months, albeit at a slower pace, the Germany-based integrator said.
According to the latest forecast from DHL’s index, global trade is now at the 63-point level, which is a drop of four points from the previous quarter’s forecast. Under the GTB methodology, an index value above 50 denotes over positive growth in world trade, while values below 50 indicates contraction. The value is based on DHL data collected from seven countries – China, Germany, India, Japan, South Korea, the United Kingdom and the United States – and calculated using artificial intelligence algorithms.
Tim Scharwath, CEO of DHL Global Forwarding and Freight, likened the results to a seasonal shift in the weather. “After months of hot conditions and bright prospects in world trade, temperatures are dropping. We are moving into more normal and cooler – but still nice – temperatures,” he said. “Despite rising political tensions among global players over trade-related issues, the DHL Global Trade Barometer indicates solid positive growth for world trade in the coming three months.”
Most of the slowdown, DHL said, is coming from the airfreight sector. Looking at just the air component of the GTB, the index value for growth fell by eight points to 62 for air cargo, while the ocean trade component only dropped by one point to 63.
India was the only GTB country reporting high prospects for trade growth, rising four points to reach 83, while the U.S. fell five points to match the overall index (63 points). The U.K., still showing signs of uncertainty regarding Brexit, was lowest at 57 points.