Kuehne + Nagel’s gKNi World Trade Indicator has recorded a firm drop in trade levels which has been credited to the ongoing trade war between the US and China.
The indicator stood at 139.7 (+7.5% YoY) at the end of August, 2018, -1.3% compared to the previous month, with the drop in August is turning out to be the largest monthly contraction reported in 2018.
gKNi said in a statement: “The prospect of escalating 'trade wars' remains on investors' minds as recent survey data from Bank of America has shown: pressures on the institutional set-up behind the current global trade order continues to be viewed as the biggest tail-risk for the world economy.”
While the advanced economies are experiencing a steady trend, Japan and emerging markets have lost considerable momentum.
This trend will continue in September according to LogIndex forecasts.
World Shudders as US-China Trade War Nears
Foreign trade will reach negative territory in South Korea, Taiwan, and Japan (YoY).
In particular, exports are expected to fall strongly in South Korea (-11.8%), Japan (-10.2%), India (-9.8%), Taiwan (-8.0%), and Brazil (-4.8%).
Also Chinese exports growth YoY is expected to slow down from +12.2% in July to +7.0% in August. We see this trend continuing throughout September.
This trend is in line with the latest manufacturing output forecasts.
In September, the global industrial production will reach the lowest monthly increase since July 2015, according to LogIndex AG.
The gKNi World Industrial Production (WIP) provides a real-time assessment of the activity in the manufacturing and mining sector around the globe.
The seasonally and inflation-adjusted indicator is expressed in month over month percentage changes.
Read more: World Trade Booming
