Subscribe to our free, weekly email newsletter!


Trade likely to grow by 13.5% in 2010, WTO says

image
By Patrick Burnson, Executive Editor
September 29, 2010

Following faster than expected recovery in global trade flows so far in 2010, World Trade Organization economists have revised their projection for world trade growth in 2010 upwards to 13.5 percent.

The WTO’s March forecast was a 10 percent expansion in trade volumes. Merchandise exports of developed economies are predicted to expand by 11.5 percent in volume terms while the rest of the world (including developing economies and the Commonwealth of Independent States) is expected to see an increase of 16.5 percent for the year.

“If U.S. shippers are not involved in global trade now, they should be,” said export compliance expert Beth Peterson. In an interview with SCMR last week, she noted that the time is right for exporters to study new regulatory compliance standards and “get in the game.”

As reported in LM earlier this month, the WTO said the value of world merchandise trade rose around 25 percent in the first six months of 2010 up strongly from the same period of 2009.

According to the WTO, this would be the fastest year-on-year expansion of trade ever recorded in a data series going back to 1950. But such a large growth rate should be understood in the context of a severely depressed level of trade in 2009, when world exports plunged by 12.2 percent. The next fastest year-on-year growth was 11.8 percent in 1976, one year after the then unprecedented decline of 7.3 percent in 1975.

“The strong recovery of trade signals improved economic activity worldwide,” said WTO Director-General Pascal Lamy. “This surge in trade flows provides the means to climb out of this painful economic recession and can help put people back to work. It underscores, as well, the wisdom governments have shown in rejecting protectionism.”

World merchandise trade rose sharply in the first two quarters of 2010, driven by the recovery of GDP in both developed and developing economies. Most economists expect output growth to slow in the second half as fiscal stimulus measures expire and the inventory cycle winds down. This is likely to restrain the growth of trade in the second half of 2010 compared to the first half.

The global trade growth projection is consistent with the WTO Secretariat’s time-series model for import demand in a range of advanced economies, and assumes a reduced rate of GDP growth for developed countries in the second half of 2010 rather than an absolute decline.

Risks to the forecast are mostly on the downside, particularly if an unforeseen financial or macroeconomic shock triggers another economic downturn. However, some upside potential exists as well if growth is better than expected in the second half of the year.

About the Author

image
Patrick Burnson
Executive Editor

Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

In this webcast we'll explore how successful companies use strategies such as cross-client load consolidation, zone skipping, pooling, etc. to minimize freight cost. You’ll hear how transportation optimization is used to generate cost savings and where the ROI comes from.

Even with expected import cargo volume declines in the coming months, the Port Tracker report by the National Retail Federation (NRF) and maritime consultancy Hackett Associates expects volumes to be up for the first half of 2016.

USPS pointed to ongoing growth in its Shipping and Package Group, whose primary offerings are comprised of Priority Mail, Express Mail, Parcel Select and Parcel Return services, as the key driver for the quarterly revenue gains.

With a 2.3 cent decline to $2.008 per gallon, this week’s price stands as the lowest national average going back to the week of March 16, 2009, when it checked in at $2.017.

A recent Wall Street Journal report stated that third-party logistics and freight transportation services provider XPO Logistics shut down seven freight terminals that were part of the Con-way Inc. less-than-truckload (LTL) network, Con-way Freight. Con-way was acquired by XPO for $3 billion last year.

Article Topics

News · All topics

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2016 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA