Strong Global Trade Rebound for Two-Consecutive Months: CPB

Since July, global trade volume continues to rebound, signaling economies' restarting in a bid to make up the worldwide lockdown this spring due to the pandemic.

In a report released by the CPB Netherlands Bureau for Economic Policy Analysis, the CPB World Trade Monitor in July grew 4.8% compared to June, the largest increase since the bureau began compiling statistics in 2000. This is slightly less growth than June when global trade saw an uptick of 7.9% compared to May. CPB points to lifting quarantine and lockdown restrictions worldwide as the primary contributor to the significant rebound.

Trade rebound is seen in most areas worldwide: July saw the most significant growth from the U.S. at 11%, followed by China at 9.5% and the eurozone at 5.5%.

Many advanced countries saw rebounds in both imports and exports. Though the rebound in imports for emerging countries was significantly smaller: China only saw 0.5% growth in July, while other emerging countries in Asia only increased by 1.7% of imports compared to the previous month. Despite the positive outlook in July, global trade still fell short of last year's numbers, off by 6.6%.

According to the PMI released by JPMorgan Chase and IHS Market, the current CPB index forecasts the rebound to continue into August. Chemical products and basic materials mostly buoy the improving August PMI export figures. However, forecasting struggling times, machinery and equipment suppliers point to a declining growth of exports.

However, ING Think Senior Economist Joanna Konings said sustaining recovery for the rest of 3Q is boosted by increases in manufacturing and export orders and improving consumer confidence. However, she also warned that continual recovery depends on the extent of new lockdown restrictions in major countries, specifically manufacturing and production chains.