The supply chain is in a mess. So how does trade flourish?
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We have been told that world trade is booming.
After a sharp decline in the second quarter of 2020, exports soared to September, higher than the level before the pandemic began to affect the global economy, and now at the highest level in history.
On the surface, economists in manufacturing powerhouses such as Germany warn that while the parts procurement problem is affecting GDP data, we are predicting a boom in exports, which seems confusing. This is Carsten Brzeski of ING:
Although financial markets have become increasingly concerned about the Delta variant and its potential to undermine the global recovery in recent days, we actually believe that supply chain friction rather than the coronavirus is the biggest risk to the German economy in the second half of the year.
We are not sure what the answer is, but Data released this week A big clue from the Organization for Economic Cooperation and Development on commodity trade in the second quarter.
According to OECD data, Australia’s exports increased by 10% between the first and second quarters. Brazil’s exports soared by 29.4%. Russia’s exports increased by 30.7%.
What do these countries have in common? They are all major commodity exporters that have benefited from the triple blow of “increased prices, limited global supply and strong demand.”
At the same time, the export growth of manufacturing powerhouses has become more stable. For example, German exports only increased by 1.3%, while China’s exports fell by 2.5%.
We don’t want to have any impact on the excellent work done by many manufacturers in the world to readjust their operations in response to the pandemic. When it comes to global recovery, thank them a lot.
However, one of the underestimated reasons why we have seen such a significant rebound in trade is the commodity boom.