2017 Was A Great Year For Global Trade

Posted by on Dec 27, 2017 in News, News & Articles | Comments Off on 2017 Was A Great Year For Global Trade

We here at Brett Tarnet Insurance Services keep a close eye on world trade, and our clients are part of the picture.  We saw an uptick in activity for most of our clients in the last year,  contrasted with what looked to us like a tough 2016.   I went looking for confirmation, and explanation.  Here’s what I discovered.

The OECD (Organization for Economic Co-operation and Development), and the WTO (World Trade Organization) have published some facts and figures that illuminate the trade picture.

2016 Trade Weakness

2016 was a year of negative growth rates in global trade.  The dollar was very strong in global markets, exacerbating the slump in U.S. export markets for 2016.

2017 Was Definitely a Stronger Year.

In 2017, the dollar strengthened against global currencies, and growth in Europe and Asia increased in the merchandise and service sectors.  One interesting note is that imports to the U.S. showed slower growth in 2017.  U.S. trade growth was driven by exports this year!

Sector Analysis

Of merchandise sectors, global trade in agricultural products grew strongly, and services were a significant component of trade growth as well.   Trade in manufactured goods showed growth in 2017 but fuel and minerals sectors were weak, as prices were lower.  We can attribute weakness in fuels to the glut in oil supply.   Demand  in China for minerals slowed as they rebalance their economy to focus less on manufacturing.  South and Central America regions showed weak trade growth, attributed largely to Brazil’s continued economic troubles.

The EU demonstrated impressive strength, outpacing the volume of trade in any other bloc.   It will be interesting to see what develops as Brexit moves through the region. How will U.K. trade be affected as the country exits the EU?  Will  there be a difference in growth of U.K. versus the rest of Europe?

The WTO numbers offer great graphs which give a comprehensive picture up to Q1 of 2017.  Here’s that site. 

OECD rounds up statistics through Q3 of 2017, here’s  a link to that information.

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