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Dire statistics on economic activity are mounting.
The U.S. economy may have dropped an annualized 48% in the second quarter, according to the Atlanta Federal Reserve’s GDPNow tracker. The British economy fell 20% in April, according to statistics released last week. China, first to suffer but also first to open up after the pandemic, still is seeing retail sales fall, according to data released on Monday.
But global trade is actually holding up, according to a new analysis by UBS.
Official data on world trade are dated, released with a roughly three-month lag by the Netherlands. UBS said it has put together a more timely report based solely on global trade volume delivered on ships, which represents about 80% of the total. That leaves out cargo traffic from airlines as well as cross-border trucking shipments.
So far, UBS concludes, world trade volumes are down just 6%, which isn’t as bad as the 13% to 32% decline forecast by the World Trade Organization, and the 18% decline during the global financial crisis.
There is bad news as well, however, as it doesn’t look like the shipping data have bottomed.
“This could be the lag between orders and shipping time, or the ‘bullwhip’ effect: in the face of uncertainty, inventories are drawn down first, leading the trade decline to overshoot,” said analysts led by Pierre Lafourcade.
The other key point is that data on ships ignores services, notably tourism.
