Capgemini Consulting Global Trade Flow Index Highlights Cautious Growth in Q2 2010 Concentrated in Asia and Latin America

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Paris, October 29, 2010 – The report outlines continuing strength in trade flows in Q2 2010 growing by 3.6 percent, even if weaker than the 5 percent trade growth noticed in Q1 2010. China, in particular, witnessed a surge of 19 percent as compared to the previous quarter (Q1 2010), leading it to take over from the United States as number one in overall trade volume. The report highlights cautious optimism in global trade, with concerns remaining over the impact of the withdrawal of stimulus measures through Q3 and into Q4 2010.

For Q2 2010, the report outlines continued confidence based on trade in raw materials, specifically relating to demand in Asia-Pacific, and in relation to the export of manufactured goods, particularly from Germany and Mexico. China continued to surge ahead of global averages, growing by 19 percent in Q2 2010 compared to Q1 2010, due to robust domestic consumption and a significant jump in industrial production; Australian exports rose by a massive 20 percent in Q2 2010 due to a pick-up in demand for raw materials, particularly iron and coal. In contrast, economic growth in the US has slowed in Q2 compared with Q1 2010 (GDP growth rate declined from 1.2 percent in Q1 2010 to O.9 percent in Q2 2010). While US international trade has increased in volume (5.2% percent q-o-q growth in Q2 2010), imports have continued to outpace exports leading to sustained trade deficits (- 49 Billion USD in June 2010). In addition to the trade in raw materials, global trade during Q2 2010 was also fuelled by the export of manufactured goods. Mexico’s exports rose by 5.3 percent due to the sale of automotive parts to the United States. Germany continued to outperform the Eurozone area, with trade growing by 9.4 percent, supported by exports particularly to Asia (cars, machinery and equipments for plants, chemical products) and due to the depreciation in the value of the euro.

Previous Global Trade Index reports have drawn parallels across the BRIC countries, but the Q2 2010 edition demonstrated differences between these economies’ trade flows. Brazil witnessed continued growth in Q2 2010, with trade increasing by 7.8 percent compared to the previous quarter, due to steady growth in agriculture and services sector exports. In contrast, both India and Russia saw overall contraction in trade volumes. Import and export growth contracted in India during Q2 2010 by 1.4 percent compared to Q1 2010, where domestic consumption also dropped by 5 percent. Russia, meanwhile, had a reduction in total trade volume of 4 percent compared to Q1 2010 driven by weaker prices for its oil and commodity exports.

Capgemini Consulting expects world trade to continue with modest growth in Q3 2010 but there are several major risks for the near-term global trade outlook. All eyes will be on monetary and fiscal policy in the coming months, and whether growth will be limited by the withdrawal of stimulus measures. We have seen increased trade as inventories of manufactured goods are re-stocked and fuel exports, but it is unclear whether this is merely temporary respite, rather than the foundation for sustained recovery. Unemployment remains high, while the euro remains weak, which underlines our ongoing concern with regard to trade imbalances in the Eurozone area,” explained Roy Lenders, Vice President Supply Chain Management at Capgemini Consulting.

See the press release for an extract of the ranking with the 13 leading countries.

*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 April to June 2010. 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 Q1 2010 is used to publish the indicator at the end 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

A full copy of the report can be downloaded here.

About Capgemini
Capgemini, one of the world’s foremost providers of consulting, technology and outsourcing services, enables its clients to transform and perform through technologies. Capgemini provides its clients with insights and capabilities that boost their freedom to achieve superior results through a unique way of working, the Collaborative Business ExperienceTM. The Group relies on its global delivery model called Rightshore®, which aims to get the right balance of the best talent from multiple locations, working as one team to create and deliver the optimum solution for clients. Present in more than 35 countries, Capgemini reported 2009 global revenues of EUR 8.4 billion and employs over 100,000 people worldwide.

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