Capgemini Consulting Global Trade Flow Index Reveals United States Regains First Place Ahead of China in Q4 2010

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Capgemini Consulting’s analysis shows continued growth in global trade flows in Q4 2010, with an increase of 2.5 percent, although at a slightly slower pace than the 4.67 percent trade growth recorded in Q3 2010, due to the threat of a sovereign debt crisis in the EU and inflation in developing economies. The report also highlights a good recovery in US exports in Q4 2010, which witnessed growth of 2 percent compared to the previous quarter (Q3 2010), thanks to a weaker dollar coupled with a rebound in the global economy. At the same time, China’s export of goods and services decelerated by 2.9 percent quarter-on-quarter, leading the United States to regain its position over China in overall trade volumes.

Capgemini Consulting’s Global Trade Flow Index tracks the trade of goods and services by quarter based on an analysis of a number of trade and market-related parameters from the latest available official data (related to the import and export of goods and services) from national agencies of the 23 top countries in terms of global trade. This edition of the report highlights stability in global trade volumes in Q4 2010 due to monetary tightening measures taken by the world’s major economies, although risks such as inflation still remain in many markets.

The report reveals growth in the BRIC countries is beginning to slow as inflation becomes more of a serious threat, particularly in China and India. In China, government monetary tightening measures and a dip in services trade led it to slip from the top spot in global trade volumes, as the market here becomes less focused on exportfueled growth and more on producing consumer goods. In addition, Russia’s GDP grew at a moderate pace as business investment rose and exports of goods & services grew by 6% q-o-q driven by energy and raw material exports in Q4 2010. In Brazil, while foreign trade levels may have increased, with 9 percent growth in total trade volumes in Q4 2010, it is dependent on the US for more than a third of its total trade and any change in the economic environment or trade policy here may impact Brazil’s future growth. However, India’s exports of goods and services grew by
8.7 percent on Q3 2010 as government stimulus packages were announced and manufacturing, services and agriculture began to recover.

In the Eurozone area, Germany continues to outperform thanks to highly favorable labor market conditions, moderate inflationary pressures and buoyant consumer confidence, despite a 2 percent drop in its trade levels in Q4 2010 compared with Q3 2010 due to a competitive devaluation in its target export markets such as the Netherlands and France. The Netherlands was also a strong performer with a rise in total trade volumes of 3 percent in Q4 2010 compared to Q3 2010. In general, easier labor market conditions, subdued inflation and an increase in consumer spending is leading to a recovery in trade levels in Europe.

Government tightening measures in some of the world’s biggest economies mean we are starting to see trade levels in Europe and the US picking up again,” said Roy Lenders, Vice President Supply Chain Management at Capgemini Consulting. “At the same time, rising inflation is causing concern about growth levels in the BRIC countries. These emerging market economies will need to very carefully manage the complex trade-off between robust growth and rising inflation if they are to maintain growth here.”

APPENDIX Capgemini Consulting Global Trade Flow Index (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. This latest version of the Index employs a new methodology and as such, Q4 2010 figures are based on estimates (detailed below) while Q3 2010 figures are based on official data. By applying this methodology, global data for Q4 2010 has been assessed ahead of official data for all 24 countries being fully available, in March 2011, to give a robust analysis of the quarter’s performance.

The Index tracks global trade levels by quarter, based on Capgemini Consulting’s own analysis of trade and market-related parameters from the latest available official data from national agencies. This analysis is performed by applying the LOGEST formula to historical trade, GDP, domestic and foreign market data.

The index will be updated and published each quarter to reflect developments in global trade flows. The latest version of the Index covers the period October to December 2010. The Index analyses 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 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 from: /insights-and-resources/by-publication/g lobal-trade-flow-index-q4-2010/

About Capgemini
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