As we wrestle with COVID-19, is international trade back up, backing up, or is there a backup in capacity that’s stalling things?
Global trade is a big part of getting the world economy going again. Trouble is, there’s still a lot that’s holding it back. With key indicators everywhere now showing large increases, is international trade back up, backing up, or is there a backup in the process that’s keeping a lid on activity?
It may take a few more weeks to tell. For the most part, world exports continued to fall through May, the last month of available data. True, there was positive movement in China, the Euro Area and other advanced economies, excluding the United States and Japan. However, there was still enough decline in the world as a whole to pull the total down about 18% since the end of 2019.
Developed markets have taken the harder hit, down 26% through April, although collectively there was modest improvement in May. Not so for the emerging world; China’s gains weren’t enough to sway the total, which slid in May to a cumulative decline of 13% since the start of the year.
Still, the modest rise in developed-market exports is encouraging, and hopefully a leading indicator for the rest. The sharp increase in June retail sales in the U.S, the United Kingdom and Canada to pre-COVID-19 levels is almost sure to fire up export activity in June and beyond...
This was excerpted from a 30 July 2020 commentary by Peter G. Hall, Vice-President and Chief Economist, Export Development Canada.