Hackett Associates rolls out debut edition of its Global Trade Pulse report

Global maritime and trade consultancy Hackett Associates has formally introduced a new proprietary trade-related index, entitled “The Global Trade Pulse.”

Hackett officials described this new offering as a short-term index that offers up “the sentiment for trade at a glance,” akin to other key economic metrics like the PMI and Consumer and Carrier confidence indices, while providing access to specifically see where a group of economic indicators are in relation to trade for the current month, too.

In terms of how data and information within the Global Trade Pulse is compiled, Hackett explained it models container trade for both North America and Europe, which accounts for 67 percent of global trade, according to data from Container Trades Statistics. What’s more, Hackett noted that the East-West focus of the Pulse “represents the large majority of developed world consumer demand,” and that “planning for the immediate future will be easier and…will provide improved clarity to current events.”

Hackett Associates Founder Ben Hackett said in an interview that for a number of years his firm has felt that a global trade index like this could be very useful as a meaningful economic indicator.

“For our own modeling, we use a lot of indices like the Consumer index, PMI, and Industrial production, and when they are put all altogether, we get very good results for a global trade model for both North America and into Europe,” he said. “Before publicly releasing it, we tested the model out against [historical data] to see how well it was predicting, and it came out fairly robust, with good information for a trade index for different data points like volume, imports, and exports. We think it provides a good view of what is coming down the road over the next three-to-six months, as well as comparing things to where we are today.”

From a North America perspective, the debut edition of the Pulse noted that with consumers serving as “the crux of trade,” with their buying and spending patterns pacing trade volumes in developed economies, U.S. consumers are outperforming fundamental economic indicators with strong imports, which implies that GDP could be set for growth compared to recent quarters, while export side activity is dealing with the strong dollar slowing down trade volumes.

The current North America Import Pulse (for the month of July) is at 114.8 (2012=100), which is 2.7 percent ahead of June and 1.8 percent higher than July 2014, and the Export Pulse at 110.6 is up 2.4 percent compared to June and up 0.7 percent compared to July 2014.

Import and export data in the Global Trade Pulse is based on the most recent month for which full data is available. For May, North America imports at 121.6 showed a 6.9 percent swing from April to May and an impressive 8.9 percent annual boost from May 2014 to May 2015.

As the numbers indicate, North American growth is intact, and Hackett said it is likely to see further gains on the import side in August and September, albeit not at a tremendous growth rate, due to still somewhat high import-to-sales ratio.

As for Europe, Hackett said imports are underperforming in a still-weak economic climate, although exports are currently outperforming economic fundamentals, due in part to a weak Euro. But this could lead to an economic increase there, specifically in North Europe with Greece digging out of its economic issues. “A Grexit is still on the books, and this alone is causing hesitation in the market,” said Hackett.

The European Import Pulse at 108.1 saw a 0.6 percent increase from June to July and a 1.5 percent annual decrease, while the Export Pulse at 111.0 rose 2.8 percent from June to July and a 5.5 percent gain from July 2014 to July 2015. May imports in Europe at 116.3 were up 11.3 percent from April to May, and dropped 2.4 percent from May 2014 to May 2015. May exports in Europe were up 4.2 percent over April and up 6.0 percent annually.

Hackett Associates is currently looking for sponsors for the Global Trade Pulse.