Global trade saw improvement in June as economies around the world picked up, fostering economic activity.
Trade volumes grew 7.6% monthly in June, according to a report from the Netherlands Bureau for Economic Policy Analysis released on Tuesday. This marked the fastest growth since the organization began tracking it in 2000. It was also the first improvement since the pandemic took hold at the beginning of the year. In May, trade flows fell by 1.1% monthly, and in April, volumes declined by an atrocious 12.3% month over month.
Trade is still down from the pre-coronavirus days. According to the CPB report, the flow of goods from April through June was 12.5% lower than it was in the first quarter. If that weren’t bad enough, the report confirms that global trade fell by the most in two decades, surpassing the damage done in the 2008-2009 financial crisis. The landscape for international exchange was not ideal going in to the pandemic, but then Covid good and mangled international supply chains.
Now, export growth is recovering. Sales from the United States rose by 13% monthly, more than the 10.9% averaged by advanced countries around the world. Export growth in developing countries was a more modest 5.1%, weighed on by a 1.4% fall in exports from China.
Back in April, the World Trade Organization forecasted that global trade would fall between 13% and 32% in 2020. The organization now predicts that international trade will fall by 13% this year. So, still historically bad, but at least it falls in the optimistic range of that original forecast. Odds are that international exchange won’t come fully back online until demand comes back. And that will require a more robust global economy.