Panjiva data shows sharp declines in global trade activity from August to September

New data from Panjiva, an online search engine with detailed information on global suppliers and manufacturers, found that there was a “significant seasonal drop in global trade activity in September.”

This was reflected in matching 8 percent declines for the number of United States-bound waterborne shipments and the number of global manufacturers shipping to the U.S. from August to September.

Shipments were down for the second time in the last six months at 1,030,068 for the 8 percent decline. This is steeper than the sequential drop-off in recent years, with 2010 down 6 percent, 2009 down 5 percent, 2008 down 7 percent, and 2007 down 4 percent during the same timeframe.

Manufacturers shipping to the U.S. hit 141,435, which was also steeper than declines in previous years, with 2010 down 6 percent, 2009 down 5 percent, 2008 down 7 percent, and 2007 down 4 percent.

Earlier this year, Panjiva CEO Josh Green told LM that with August typically being the peak year for shipment and manufacturer levels for global trade, that coming declines were likely. With September’s numbers, Green’s forecast was indeed correct.

“We did expect to see this decline,” he said, “but what is somewhat disconcerting is the magnitude of the decline. If you compare it with the declines of previous years, it is the largest we have seen in the last four years. It gives fuel to the fires of fear that are consuming [stakeholders] in global trade right now. As we look around the world and see macroeconomic challenges looming, it is reasonable to be concerned.”

Part of the reason for this is that September shipments represent post-holiday orders, which Green said were being made without a sense of truly knowing what lies ahead, with those parties making orders being somewhat cautious for beyond the holiday season.

And until there is clarity on how resilient consumers are the holiday season, Green said it is unlikely businesses will be aggressive in their buying strategies.

“Businesses have basically decided that it is better to be caught too lean with inventory than the alternative,” said Green. “Typically what we see is a slow decline through February at which point we should see growth again.”

Given this situation, Green said it is expected that businesses will remain cautious with order and buying patterns, adding that he will be taking a close look at the difference between the peak in August and the trough in February in terms of how sharp the declines are, coupled with levels of supply chain contraction.