Kiel Trade Indicator 11/21: Fragile upward trend in global trade

In its latest data update for November 2021, the Kiel Trade Indicator signals fairly positive trade figures overall (month-to-month, price and seasonally adjusted). However, the upward movement threatens to be short-lived: China is sheering out with negative numbers. And congestion in container shipping remains at a decidedly high level and thus stands in the way of a longer-term upward trend. With this data update, the Kiel Institute introduces a number of improvements for the Kiel Trade Indicator, the most important of which is that from now on the estimates will be price-adjusted.

After months of stagnation, US trade could record a positive trade impulse again in November compared to the previous month for the first time since July. Estimates from the Kiel Trade Indicator are up for both exports (+3.2 percent) and imports (+2.3 percent) (price and seasonally adjusted).

Germany's exports could increase slightly (+1.2 percent), while imports are likely to stagnate (0.0 percent). For the EU slightly positive developments are possible for both exports (+0.9 percent) and imports (+0.4 percent).

Total world trade is expected to be 1.7 percent higher in November than the previous month.
For China's trade, however, the Kiel Trade Indicator signals negative values. It shows a decline of 3.6 percent for exports and 2.0 percent for imports. The gentle upward trend of September and October would thus be broken.

"The positive trade figures for the month of November are encouraging. However, the upward movement is extremely fragile. It is to be feared that the joy will only last for a short time due to the still massive congestion in global container shipping. Congestion has remained at a very high level for around two months, preventing a clear upward trend in global trade," says Vincent Stamer, Head of Kiel Trade Indicator at the Kiel Institute.

Around 8 percent of global freight capacity in container shipping is currently tied up in congestions off the US ports of Los Angeles/Long Beach and Savannah, as well as in the Pearl River Delta and off Ningbo-Zhou in China. More than 11 percent of all shipped goods are stuck in queues.

The volume of cargo in the Red Sea, an important indicator of European-Asian trade, has come somewhat closer to its expected level, but still lags behind it by around 7 percent.

"Christmas shopping this year is clearly under the sign of supply problems, which is expressed in a reduced supply, longer delivery times and higher prices. But German industry is also cooking on the back burner due to a lack of intermediate goods. Improvement is not in sight until after the Chinese New Year in the first half of 2022, but even then, it might take some time before the global supply network is swinging back into sync. Delivery delays and bottlenecks could therefore keep us busy well into next year," says Stamer.

Update for the Kiel Trade Indicator

With the latest data update, the Kiel Institute introduces a number of improvements to the Kiel Trade Indicator. The most important is the conversion of trade estimates from nominal to real data. The price adjustment increases the estimation accuracy of the Kiel Trade Indicator, for instance because price fluctuations due to supply bottlenecks or inflation are no longer reflected in the trade data.

In addition, estimates are made for a larger number of countries and regions. The update provides better coverage of the Global South, such as Sub-Saharan Africa, North Africa, the Middle East, or emerging Asia. We also break down Europe's trade into intra- and extra-EU trade flows.

This is accompanied by a change in reporting for the media. The Kiel Trade Indicator will continue to be updated twice a month on the website. At the 20th for the current and the following month (from now on without media information) and at the 5th with updated data for the past month (from now on with media information) as well as an initial estimate for the month just started.

The next Kiel Trade Indicator updates will be on December 20 (without media information) and January 5 (with media information for December 2021 trade data).

For more information on the Kiel Trade Indicator and forecasts for all 75 countries and regions, please visit www.ifw-kiel.de/tradeindicator.

Media Contact:
Mathias Rauck
Press Officer
T +49 431 8814-411
mathias.rauck@ifw-kiel.de

Kiel Institute for the World Economy
Kiellinie 66 | 24105 Kiel | Germany
T +49 431 8814-774
F +49 431 8814-500
www.ifw-kiel.de

Wissenschaftlicher Ansprechpartner:
Vincent Stamer
Presidential Task Force,
Trade Policy Task Force
T +49 431 8814-228
vincent.stamer@ifw-kiel.de