Here’s an interesting way to look at the world.
In a new report titled “The Super-Cycle Lives: EM Growth Is Key,” Standard Chartered analysts present this chart of world exports as a percentage of GDP.
It’s not too surprising. Exports have been clearly increasing as a percentage of GDP.
What’s interesting about this particular chart is that its data goes all the way back to 1820.
The analysts, led by John Calverly, offer some commentary on what’s behind the recent slowdown:
World trade growth collapsed in 2009, but recovered strongly in 2010-11. Trade growth has been disappointing in 2012-13, expanding only about 2% each year in volume terms, less than GDP growth, which is unusual. There is concern that this slowdown is structural, linked to a deceleration in the expansion of the global production chain (which had been turbo-charged by China‟s WTO accession in 2001), or creeping protectionism since the financial crisis. While there may be elements of truth here, we believe the slowdown is mainly cyclical. Europe comprises a large share of world trade (partly because trade between European countries is large) so the region‟s recession has made a large dent. Moreover, the European recession brought a general slowdown in manufacturing worldwide as an inventory correction occurred. Manufacturing still dominates global trade.
“Longer-term, we are optimistic that world trade will resume faster growth and return to its usual pattern of outstripping GDP growth,” they add.
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