New data from the Panjiva research team.  Interestingly, our analysis of the U.S. shipping data through March seems to back up U.S. Treasury Secretary Tim Geithner’s recent claim that “the decline in world trade may be abating.”  Specifically, from February to March, there was a slight increase in the number of companies shipping to U.S. customers (up to 120K in March, versus 118K in February).  That’s the good news.

The bad news is that there is still a tremendous amount of risk in the system.  At the end of March, as usual, we took a look at significant manufacturers, and we found that 30% of these companies qualified for the Panjiva Watch List, as a result of suffering a 50% or greater decline in volume shipped to U.S. customers during the most recent three month period, versus the same period a year ago.

Also, 40% of significant U.S. buyers have an active relationship with at least one Panjiva Watch List manufacturer.

The comparable numbers for February were similar: 29% of significant manufacturers were on the Panjiva Watch List, and 40% of significant U.S. buyers maintained an active relationship with at least one Panjiva Watch List manufacturer.

Bottom line…  There’s some chance we’ve hit bottom, but it’s quite clear that we’re not remotely out of the woods yet.

Last week, President Obama warned that the United States is unlikely to return to its role as a “voracious consumer market.”  If he’s right, the effect on global manufacturers is likely to be profound.  Panjiva’s latest analysis of February shipping data illustrates this point.

From January 2009 to February 2009, in just a single month, the number of global manufacturers shipping to the U.S. dropped 10%, from ~131K to ~118K.

In case you’re wondering if it’s a seasonal thing, it’s not.  In 2008, from January to February, there was a very slight increase in the number of companies shipping to the United States (from ~147K to ~148K).

• Along similar lines, the percentage of significant global manufacturers on Panjiva’s Watch List has grown to 29%.
• The percentage of significant U.S. buyers doing business with Watch List manufacturers now stands at 40%.

At some point, the numbers have to start painting a rosier picture.  However, for now, it seems clear that the global economy has not yet hit bottom.

Methodological notes:

• Watch List manufacturers are those that, during the most recent three month period, suffered a 50% or greater decline in volume shipped to their U.S. customers, versus the same period a year prior.
• Significant manufacturers are those that have sent 10 or more shipments to the U.S. by boat in the last 12 months, and at least one shipment by boat to the U.S. in the last three months.  As of the end of February, there were ~93K significant manufacturers.  (Note that this number is different from the number of companies that shipped to the U.S. during February.  Not all significant manufacturers shipped in February, and not all companies that shipped in February are significant.)
• Significant U.S. buyers are those that have received 10 or more shipments by boat from overseas manufacturers in the last 12 months, and at least one shipment by boat from overseas manufacturers in the last three months.  As of the end of February, there were ~78K significant buyers.

Questions?  E-mail us at info@panjiva.com.