A Trade Miracle of Sorts: Volumes Aren't Declining…Yet

Even though you can count me in the double-dip recession camp for numerous reasons -- not the least of which is leading indicators about consumer spending declines from the Consumer Metrics Institute (which you can read more about by following the above link) -- it appears that recent trade data might not be as negative as other economic indicators. A recent post over on Panjiva's blog suggests that June trade data is "holding steady" with a 1% increase in "the number of global manufacturers shipping to the U.S. market, as well as a 1% increase in the number of U.S. companies receiving waterborne shipments from global manufacturers."

Although Josh Green, Panjiva's CEO, takes a cautious tone in the post because of "fears about weak U.S. consumer spending, European debt, and rising input costs in China," there is more good news around June's data than just a slight upswing. In addition, there are fewer suppliers on Panjiva's watch list (which is based, in part, on export declines). Also consider the magnitude of certain types of import information: "The number of waterborne shipments coming into the U.S. saw a robust 26% year-over-year increase in June," Panjiva notes, "although year-over-year comparisons continue to be a bit misleading, since global trade was struggling this time last year."

Even though June's data is impressive given all of the negative forces at work in our economy, not to mention currency and labor changes among other issues in China, we should remember about how fast overall trade data began to move South -- and the magnitude of the shifts -- during the recession of late 2008 and early 2009. If you're not using information from sources such as D&B, Equifax and Panjiva to look at overall supply risk, perhaps you should be. Or at the least, invest in a supplier performance management toolset that can provide early warning as well.

Jason Busch

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