Global trade fell 14.8% in the second quarter of 2020 according to the latest data from Tradeshift. But evidence of an upward curve in June suggests the impact of the COVID-19 pandemic could bottom out at the lower end of the 13-32% range predicted by the World Trade Organization.
Tradeshift’s Global Index of Trade Health, the full findings of which are published , uses analysis of business-to-business transaction data to present a week-by-week picture of trade activity across global supply chains. Over 1.5 million buyers and suppliers use Tradeshift to place orders and process invoices, and over $500bn in transactions cross its business commerce platform each year.
According to the report, the UK experienced the biggest drop in trade among western economies during Q2, with transaction volumes falling by 23.1%. Transaction volumes across the Eurozone fell by 21.9%, while activity in the US was down 16.1%.
China, which experienced the most significant impact on trade in Q1, saw trade activity rise by 31.8% in Q2. Transaction volumes in China surged by an incredible 430% when factories reopened at the end of February. Activity rose by a further 14% as lockdown restrictions began to ease in April, but this momentum has begun to plateau. Average weekly transactions in China have fallen by 8% since the week commencing 15th June, and as impressive as the country’s bounce back has been, trade activity in the last two weeks of June remained 22% lower than the levels Tradeshift saw on its platform in the final quarter of 2019.
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“China’s bounce back provides a useful indicator of what the shape of recovery could begin to look like as other countries start to bring the spread of the virus under control,” said Christian Lanng, CEO, Tradeshift. “A huge domestic market gives China certain advantages in terms of the speed of its recovery. But the interconnected nature of global supply chains means that not even China can fully recover in isolation. The whole ecosystem needs to be in good working order. Right now, that is not the case.”
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