In the twin ages of big data and fake news, trade statistics play a vital role, both as signposts to the future and as reportage on the past.
These days such stats can make grim reading, but only if you focus on those in the immediate past since COVID-19 caused a worldwide economic lockdown.
Yes, there are tough times to come, the data tells us. However, there are also statistical signs that economies are starting to recover, as lockdown restrictions continue to ease.
Here, we look at five key stats about global trade today we believe you will find useful in understanding global trends – while impressing your boss or those dinner party guests who beckon as lockdowns lift.
1. $12 trillion hit and a two-year recovery forecast
No surprise here but the global economy has taken a massive hit due to the pandemic, with the IMF this week predicting the global economy will shrink by $12 trillion this year.
Its ‘World Economic Outlook’ forecasts the UK economy will shrink by 10.2% in 2020, with France and Italy also expected to shrink by double digits (12.5% and 12.8%).
The IMF, whose key role is to help countries in financial difficulties, predicts a recovery of 5.4% growth in 2021 but this number would plummet to zero should a second wave of the virus spread early next year.
It also said it would take up to two years for global economic output to return to pre-pandemic levels.
2. Global trade plummets – but with silver lining
The volume of global trade in goods also nosedived in April, dropping by 12.1% from March, according to the Netherlands Bureau for Economic Policy Analysis and reported in the FT.
All regions experienced drops with the eurozone suffering most, experiencing a 20.1% month-on-month decline in trade of goods by volume for April.
The World Trade Organisation earlier this week said that goods trade fell by 3% in Q1 and 18.5% in Q2, but the “silver lining” was that this was towards the lower end of the range they predicted in March, its director general Roberto Azevedo said.
3. UK exports to drop overall…
Exports from the UK could fall by between 6-8% in 2020, a PwC analyst said in Accountancy Daily.
UK services trade will be particularly impacted, having already declined by £12.4bn in the three months to April 2020.
Jing Teow, senior economist at PwC, said that until a vaccine is found, “restrictions on the movement of people consumer uncertainty” will continue to impact transport, tourism and business services.
However, the adjustments made by businesses to work at home during the crisis, could diminish the need for “physical interactions” post-pandemic.
“Trade in business services, which is reliant on physical interaction may also come under pressure,” he said. “But the adjustment of many businesses to remote working could diminish the importance of physical interactions in the future, which could lead to positive effects on the sector’s carbon footprint.”
Speaking of which, see 5 below.
4. …as UK manufacturing begins to stabilise
The most recent IHS Markit/CIPS Purchasing Managers’ Index – an authoritative measure of UK output, new orders and employment – showed that UK manufacturing has returned to growth.
The index score for June was 50.1, with any score above 50 indicating growth.
This was up from 40.7 in May and a record low of 32.6 in April.
5. The boom for Zoom
The use of teleconferencing programme Zoom increased by 20 during the lockdown, with the proportion of adults using it doubling.
Online Nation, an annual report into digital trends and behaviours, showed that time spent online increased by 14% compared with September 2019, reaching a daily average of four hours and two minutes per day.
Politico also report a surge in social media activity:
- TikTok reached 12.9m adult visitors in April, up from 5.4 million in January
- Houseparty – a rival to Zoom which includes interactive games – grew from 175,000 adult visitors in January to 4m in April
- Nine in ten adults with internet access used YouTube, Snapchat, Instagram or TikTok last year
- 32% of internet users now spend more time viewing videos online compared to broadcast television
