It’s been a busy week for industry statistics that reflect the ebbs and flows of international trade and the wider economic environment in which it operates.
Your IOE&IT Daily Update team has filtered through the mound of data to pick five core statistics to help you understand current global trade trends.
1. Uneven global recovery
The Organisation for Economic Co-operation and Development (OECD) confirmed in its latest (June 2022) Economic Outlook analysis, published twice yearly, that the world economy is on track for a strong but uneven recovery from the Covid-19 pandemic. The war in Ukraine and China’s zero-Covid policy were cited as the two root causes for slowing growth and a rise in inflation across the world.
Australia, Turkey and Argentina, all non-EU trade partners, bucked this trend. Growth in all three countries was revised upwards in the report.
According to the New York Times, OECD secretary general Mathias Cormann repeatedly stated at the report’s press launch that “we are not projecting a recession” while revising global growth down from 4.5% to 3%.
The report’s forecast for UK growth in 2022 was revised down from 4.75% to 3.64% and for 2023, will flatten to zero because of high inflation and depressed consumer demand.
According to the FT, the OECD report highlighted the effects of high UK inflation still squeezing household and corporate incomes in 2023, along with tax increases as key reasons for flat growth in 2023.
2. Manufacturing headwinds: exports fall
Another key data set from S&P noted that manufacturing was facing increasing costs and falling output, both globally and in the UK.
British manufacturing faced its lowest period of growth in the past seven months. The report noted that manufacturing costs had potentially peaked and “showed signs of levelling off.”
Duncan Brock, group director at the Chartered Institute of Procurement & Supply (CIPS), said: “Though new order levels rose for the sixteenth month, they were noticeably softer and driven largely by the domestic market. Export levels fell, hindered by Brexit customs controls and general global disruption.”
3. Construction sector expands at slow pace
Data recently released by the S&P Global/CIPS UK Construction PMI found activity in the sector, a core importer of raw materials, expanding at the slowest pace since the start of this year.
Whilst May’s construction sales marked two years of consistent growth, inflation, higher borrowing costs and decreased customer confidence hurt numbers overall.
The report also highlighted strong job creation, an increase in the commercial building sector, and positive news from construction suppliers – some of which reported sourcing materials easier.
Tim Moore, economics director at S&P, said to the London Evening Standard: “May data signalled a solid overall rise in UK construction output as resilience across the commercial and civil engineering segments helped to offset weakness in housebuilding.”
4. Challenges for SMEs
The number of UK exporters increased slightly in May 2022, according to the latest Exporter Monitor. However, this overall growth masks a revenue crisis for micro and SME exporters.
Data published by the Aldermore group found that over half of British SMEs have been impacted by the ongoing supply chain crisis in the last 12 months, with the cost to each business impacted averaging around of £881,000.
5. Food and drink success
The Food and Drink Federation (FDF) reported a strong return to growth for the sector in Q1 of this year, powered by record levels of non-EU exports.
Exports of gin doubled as the world discovers the benefits of Britain’s favourite tipple, whilst beef and tea products also enjoyed strong growth.
Recently, the FDF urged the government to adopt its strategy for UK investment in food and drink exports which includes a digital overhaul of the border for food and drinks trade, tariff reform and long term investment in UK manufacturing.