Global trade is slowing - Natixis

Patrick Artus, Research Analyst at Natixis, suggests that since 2011, growth in global trade has slowed very markedly relative to global GDP growth.

Key Quotes

“This slowdown may have several causes:

• The declining weight of industry in the global economy;
• Energy saving efforts;
• Rising production costs in emerging countries, which discourages offshoring;
• The beginning of the “de-segmentation of value chains”, which would also reduce global trade as measured by flows relative to global trade measured by value added;
• The related desire to produce closer to the final consumers of goods and services;
• The development of automation, which reduces costs and makes production more flexible in OECD countries.”

“Reversal of the previous trend

Until the 2008-2009 crisis, global trade (measured by the gross size of exports or imports) had grown much faster than global GDP. This trend has now reversed for a number of reasons: decline in the weight of industry, energy savings, emerging countries’ reduced competitiveness, the de-segmentation of value chains, production close to final consumers, automation. Some countries will suffer from this trend reversal: those whose economies were driven by exports, such as many Asian countries.”