Capgemini Consulting Global Trade Flow Index confirms growth in worldwide trade as global economies emerge from recession

28 april 2010

End-2009 figures point to similar trade growth levels in Q1 2010 as domestic consumption increases and despite declining Government stimulus.

Capgemini Consulting, the global strategy and transformation consulting brand of the Capgemini Group, today announced figures from the latest edition of its Global Trade Flow Index*, which sees continued growth in world trade volume.

This Index tracks trade by quarter, based on the latest available official data from national agencies of the 23 Top countries in the global trade arena. Figures revealed growth of 8.5 percent in worldwide trade (the import and export of goods and services worldwide) in Q4 2009, following near-identical growth levels in Q3 2009. This points to a similar level of growth of this leading indicator for world economic health into 2010, still driven by increasing domestic consumption levels to compensate for less Government stimulus.

The Index reveals that:

• In the US, total trade grew by 9 percent in Q4 2009, aided by a relatively weak dollar to give the country its second straight quarter of trade growth;
• China became the world’s biggest goods exporter in 2009, with a jump of 11 percent in its exports in Q4 2009 compared with Q3 2009, while Brazil achieved a strong growth in the trade of goods driven by agro-exports;
• German exports in the fourth quarter of 2009 rose by 3.5 percent as compared to the same period the previous year (Q4 2008), though household consumption declined, indicating that the recovery was export-driven;
• France’s foreign trade rebounded in Q4 2009 as compared to Q4 2008; however, full-year exports declined by around 20  percent of its 2008 levels;
• BRIC countries (except for India) witnessed an improvement in their domestic consumption, while European economies experienced a crunch in domestic spending. For example, China experienced an enormous domestic stimulus in the form of easy credit and heavy infrastructure spending and Brazil benefited from government tax breaks and an increase in consumer spending as Brazil’s domestic market grew.

Based on the current available data, Capgemini Consulting expects that in Q1 2010, growth of global trade levels will continue at similar levels but sees the following major risks for the near-term global trade outlook:

• Global economies may struggle to remain self-sustaining in the post-government stimulus era
• China’s ambitious growth path may not be sustainable after the withdrawal of its crisis-mode policies

“Global trade flows in Q4 2009 have continued at the same growth rate as in Q3 2009 which is a clear indicator that the revival of the world economy is becoming more stable,” explained Roy Lenders, Vice President Supply Chain Management at Capgemini Consulting. “However, domestic consumption levels are still not strong in most developed economies which is a clear signal that the world economy is not yet able to stand on its own feet without the aid of government stimulus plans. The big question for 2010 will be whether domestic consumption will start growing again fast enough to counter declining government stimulus volumes.”  

About the Capgemini Consulting Global Trade Flow Index
The Capgemini Consulting Global Trade Flow Index is calculated for the 23 countries with the highest levels of global trade, assessing changes in competitive position of each country individually. The Index tracks trade by quarter, based on the latest available official data from national agencies. The latest version of the Index covers the period October to December 2009. The Index tracks four sub indicators for each country:

• Total trade, including both imports and exports
• Q-o-Q growth in trade
• Foreign markets for goods produced in a country
• Domestic market

The index will be updated and published each quarter to reflect developments in global trade flows. Because of the time lag in the availability of official trade data, data from Q4 2009 is used to publish the indicator in the beginning of Q2 2010. In addition, each Index also publicizes an early indicator for the subsequent quarter based on data that is already published at that moment in time by some of the 23 countries. 

The Capgemini Consulting Global Trade Flow Index is also supported by:

• Holland International Distribution Council (HIDC)
• Global Supply Chain Council in China and India
• Supply Chain Movement
• Council of Supply Chain Management Professionals’ (CSCMP) Supply Chain Quarterly

Global Trade Flow Index mei 2010