The word from Panjiva’s research team: for the third straight month, there was an uptick (2%) in the number of global manufacturers shipping to the U.S. market. Notably, this is the first time we’ve seen three monthly increases in a row since we began tracking this metric in July of 2007.
Some additional good news:
- The percentage of significant manufacturers on the Panjiva Watch List declined from 31% in April to 30% in May. This also is a first — the first decline in the percentage of significant manufacturers appearing on the Watch List since we began tracking this metric in September of 08.
- Similarly, the percentage of significant buyers having done business with a Panjiva Watch List supplier in the preceding three months declined from 41% in April to 40% in May.
These numbers lend further credence to the possibility that global trade has already hit bottom and that we are witnessing the first steps of a recovery in global trade. However, pessimists should take note of the following:
- In 2008, there was a Spring uptick in the number of manufacturers shipping to the U.S., suggesting that there’s a seasonal component to what we’re seeing.
- This most recent 2% uptick in the number of manufacturers shipping to the U.S. is modest, suggesting that recovery to pre-crisis levels of trade activity will likely take some time.
- While things are getting better in a relative sense, the absolute amount of risk in the system remains quite high. I.e., we’re likely to continue to see supplier bankruptcies, and the system as a whole remains quite vulnerable to further shocks.
Methodological notes for the data junkies:
- Manufacturers that have suffered a 50% or greater decline in volume shipped to American customers in the most recent three month period, versus the same period a year ago, are on the Panjiva Watch List.
- “Significant manufacturers” are companies that have sent 10 or more shipments to American customers within the last year. As of the end of May, there were 86,331 significant manufacturers.
- “Significant buyers” are companies that have received 10 or more shipments from overseas manufacturers within the last year. As of the end of May, there were 72,031 significant buyers.