Wednesday, October 7, 2015

Global Trade Pulse report from Hackett Associates shows ongoing gap in global imports and exports

By Jeff Berman, Group News Editor
October 07, 2015
As evidenced by the widening gap in the United States trade deficit, which has seen imports far outpacing exports for years on end, the September edition of the “Global Trade Pulse” from global maritime and trade consultancy Hackett Associates paints a similar picture for trade activity in North America, with some overlapping themes apparent in the report’s European data, too.
This is the third edition of the report, which made its debut in July. Hackett officials described report 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.”
North American data: The report’s North America Import Pulse for September at 118.6 (2012=100) was up 3.8 percent compared to August and up 2.0 percent annually, and the North America Export Pulse at 106.1 was down 0.7 percent compared to September and up 0.1 percent compared to September 2014. July imports for North America at 123.0 were up 1.8 percent sequentially and up 7.2 percent annually, with exports down 0.8 percent sequentially and down 1.7 percent annually.
Hackett officials noted in the report that the East Coast increased its share of imports and exports by 1 percent compared to June, which it said “came at the expense of the West Coast.”
Hackett Associates Founder Ben Hackett said in a recent interview that despite better than expected GDP growth in the U.S. and mild retail sales gains, a still too high inventory-to-sales ratio remains a concern.
“It is high and not budging,” he said. “And it is really high when looking at it compared to recent years. If the U.S. economy was not growing so rapidly, it would possibly signal a recession, but it is not the case even with the imbalance in the inventory-to-sales ratio. Part of the problem looks to be the ongoing increase in online sales purchases taking place, which is catching retailers off balance a little bit and impacts different types of sourcing.”
Maritime stakeholders are somewhat divided as to whether or not this shift is a permanent one, as East Coast ports were able to increase volumes and market share, due to the West Coast port labor situation, which was resolved earlier this year.
Hackett told LM today that continuing cancellation of carrier calls and strings supports his firm’s view and that of the the index in that that traffic volumes are slowing down in suggesting that Q3 and Q4 GDP will be lower.
European data: The Import Pulse for Europe at 106.2 was off 1.3 percent compared to August and down 4.9 percent annually, and the Export Pulse at 109.9 fell 1.0 percent sequentially and rose 2.7 percent annually. European imports in July at 112.1 saw a 1.0 percent gain over June while falling 5.8 percent annually, and exports for the same period at 119.8 were up 0.4 percent sequentially and up 4.9 percent annually.
Hackett said that the “split” of imports and exports between North Europe and the Mediterranean/Black Sea was flat from August to September.
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