The recent resurgence in global trade activity is showing signs of plateauing, with disparities becoming apparent between regions, according to Tradeshift’s Q2 Index of Global Trade Health.
Trade Momentum Varies Across Regions
While the U.S. and China continue to build on their recent trade momentum, Europe is struggling to keep up, and the UK is experiencing ongoing weakness. The total transaction volumes between buyers and suppliers on the Tradeshift network remained unchanged compared to the previous quarter, with growth still three points below the expected level in Q2.
A Cooling Rate of Acceleration
“Order volumes have been climbing rapidly over the last six months, but we’re now seeing the rate of acceleration begin to cool,” says James Stirk, CEO at Tradeshift. This could be the first sign that the recent resurgence in global trade is starting to stabilize, which may not necessarily be a negative development.
Key Insights:
- U.S. Continues to Exceed Expectations: Trade activity in the U.S. surpassed expectations for the second consecutive quarter.
- China’s Consistent Recovery: China’s trade activity continued to rise, exceeding expected levels by one point in Q2.
- Eurozone Stagnates: Activity in the Eurozone remains three points below the baseline, not surpassing this level in over two years.
- UK Trade Declines: The UK saw a reversal in trade activity, reflecting ongoing challenges in maintaining growth momentum.
- Emerging Markets Thrive: Countries such as Vietnam, Malaysia, India, and Mexico are benefiting significantly from the shift in global supply chains.
- Sectoral Disparities: Manufacturing activity decreased slightly, while demand for freight capacity remained high. The retail sector continues to underperform.
- Supply Chain Liquidity: Payment cycles remain 5% longer than pre-pandemic levels, posing ongoing challenges for small and mid-sized enterprises.
The global trade environment is experiencing a two-speed recovery, with some regions showing strong momentum while others struggle to keep up. It’s important for businesses to stay agile and adapt to these changing dynamics to thrive in the post-pandemic world.
