A downbeat assessment of world trade highlights the continued challenges facing the boxship business, as 2016 will have the “slowest pace of trade and output growth since the financial crisis of 2009,” according to the World Trade Organization (WTO).
The administrator for global trade accords expects world trade to expand 1.7% this year, which is lower than their April forecast of 2.8% growth. It also lowered its forecast for next year for trade to expand between 1.8% and 3.1%, down from a 3.6% forecast.
The WTO said merchandise trade volumes were down 1.1% in the first quarter, and staged only a small rebound on the second quarter. The slowdown stemmed from weaker growth in China and Brazil. North America also showed weaker import growth during the first half of the year.
The WTO did not improving export orders and container port throughput in the second half of this year, “but overall momentum in trade remains weak.”
Also concerning was the weaker “trade multiplier,” which is the ratio of trade to overall gross domestic product. Long-term, trade has grown 1.5 times the level of world GDP. But the WTO says the multiplier has fallen below one, the first time that has occurred in 15 years.
