The word from Panjiva’s research team: global trade activity held steady in August. Specifically, from July to August, there was a 1% increase in the number of global manufacturers shipping to the U.S. market.
Reasons for optimism:
- This year’s July-to-August increase compares favorably to numbers from 2008 (1% decrease) and 2007 (1% decrease)
- The percentage of significant manufacturers on the Panjiva Watch List declined to 28% — down from 29% in July.
- The percentage of significant buyers having done business with a Panjiva Watch List supplier in the preceding three months declined to 38% — down from 40% in July.
- From July to August, there was a 1% increase in the number of U.S. companies receiving waterborne shipments from overseas.
As we look ahead, it’s worth remembering that September is when global trade fell off a cliff last year. For the remainder of 2009, there are three possible trajectories for global trade:
- Cliff-diving — If we have a new shock to the financial system, look for global trade to go off a cliff for a second year in a row. Low probability (we hope).
- Holiday surge — If retailers bet on strong consumer spending in the holiday season, look for global trade to surge in the months ahead. Anecdotal evidence suggests that corporate buyers are being cautious (better to be burned by having too little inventory than by having too much), so a holiday surge is unlikely.
- Holding steady — Probably the best bet. Over the last several months, we’ve seen a slow but steady recovery of global trade activity. No reason to think we won’t see more of the same.
Of course, we’ll see soon enough. In the meantime, 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 August, there were 86,686 significant manufacturers.
- “Significant buyers” are U.S. companies that have received 10 or more shipments from overseas manufacturers within the last year. As of the end of August, there were 73,683 significant buyers.