Eco week 22-26 // 27 June 2022
economic-research.bnpparibas.com
6
ECONOMIC PULSE
INTERNATIONAL TRADE: A FEW SIGNS THAT TENSIONS ARE EASING
Although some signs of improvement are visible on certain trade routes – notably between China and the West Coast of the US – the overall
situation is still far from a return to normal. The lockdown in Shanghai will continue to have significant repercussions for the operation of ports
in China and elsewhere in Asia throughout the second half of 2022.
Albeit from very low levels, the component of Manufacturing PMI relating to delivery times has improved in the euro zone and the US, and to a
lesser extent in some Asian countries including Japan, South Korea and China. The truck drivers’ strike in South Korea, which lasted for eight days
in June, proved very disruptive to the country’s industrial production and accentuated the logistics problems in the region. Meanwhile, Chinese
1
ports face a shortage of containers, many of which remain stuck in Europe, due to the lockdown in China .
However, the global freight rate index (Chart 5) has fallen significantly since the end of April (shipping prices were down 22.7% between the third
week of April and the third week of June). This fall was largely due to lower costs for transport between China and the West Coast of the USA
(
down 42.6% over the same period), whilst costs increased 14.8% for routes between Europe and America’s east coast.
The synthetic index of tensions in global value chains, published by the New York Fed, fell half a point in May, but remains at historically high
levels (Chart 3). These minor improvements in global logistics probably reflect more than just an easing of pressure on the supply side. Global
demand is also showing signs of fragility. The global PMI for new export orders fell steeply again in May, hitting 48.9, close to its lowest level
in two years (Chart 2). In real terms, trade in goods continued to see strong trends in March (Chart 1), particularly for exports from emerging
economies. However, these figures only capture a very small fraction of trade since the beginning of the war in Ukraine.
Guillaume Derrien
1. See Asia’s Shortage of Empty Containers May Worsen on Rotterdam Jam, Bloomberg, 20 June 2022
INTERNATIONAL TRADE INDICATORS
1
. World exports by area, volume (index 2010 = 100)
2. Global manufacturing PMI, new export orders
3. Global supply-chain pressures index
World
Advanced countries
Emerging countries
1
1
1
1
1
1
1
60
50
40
30
20
10
00
60
55
5
4
5
4
4
0
5
0
3
2
1
35
0
9
8
7
0
0
0
3
2
0
5
-1
-2
2007
2010
2013
2016
2019
2022
2007
2010
2013
2016
2019
2022
2
007
2010
2013
2016
2019
2022
Source: CPB, BNP Paribas
S&P Global (Markit), BNP Paribas
Source: Federal Reserve of New York
6
. Global manufacturing PMI, delivery times
4
. Baltic Exchange Dry Index
5. Freight rate index
(Inverted line)
6
5
4
3
2
1
000
000
000
000
000
000
0
12000
10000
8000
6000
4000
2000
0
32
37
42
47
52
57
62
2
018
2019
2020
2021
2018
2019
2020
2021
2007
2010
2013
2016
2019
2022
Source: Baltic Exchange, BNP Paribas
Source: Freightos, BNP Paribas
S&P Global (Markit), BNP Paribas
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