The DHL Global Trade Barometer (GTB) forecasts a mild decline in world trade, however Japan trade growth will accelerate moderately in the next three months.
Japan has the highest growth prospects of all GTB countries. This development is mainly attributed to the strong growth predicted for Japanese ocean trade. Ocean trade is spurred by both exports and imports.
While ocean exports of Basic Raw Materials, Chemicals & Products and Land Vehicles & Parts remain sluggish, the ocean export outlook is lifted by the robust growth outlook for Industrial Raw Materials.
The bullish import of Basic Raw Materials also boosted the ocean import outlook on an otherwise woeful quarter as all other industries are expected to contract.
The outlook for Japanese air trade, however, is mildly weakening.
The air trade outlook is lifted by a modest growth outlook for air exports, driven by Capital Equipment & Machinery, Land Vehicles & Parts, High Technology and Chemicals & Products, offsetting the decline in Industrial Raw Materials.
In contrast, air imports weighed on air trade outlook with especially High Technology and Temperature or Climate Controlled goods expected to contract.
Tim Scharwath, CEO of DHL Global Forwarding, Freight, said: “Worldwide, trade conflicts continue to smolder.
“Geopolitical tensions are causing uncertainty.”
Eswar S. Prasad, Professor of Trade Policy and Economics at Cornell University in Ithaca, NY, USA, comments: “China-U.S. trade tensions have ratcheted up to higher levels and are already affecting global supply chains as businesses adjust to the new reality that both sides are digging in for a long trade war.
“Rising trade tensions in other parts of the world, including between Japan and Korea, and the looming prospect of a messy Brexit are likely to have an increasingly disruptive effect on world trade volumes.
“The level of uncertainty about macroeconomic growth prospects has driven down business investment around the world, with adverse effects on cross-border trade of machinery and equipment.
“Household consumption has remained strong in most major economies but the stagnation of trade in consumer durables, reflected in the GTB component indexes, portends weakening in this key driver of GDP growth.
“Overall, this GTB update confirms the slowdown in global growth and heightens concerns about growth stagnation in the coming months.”