Data is normally the analyst’s best friend. Add a dollop of volatility, and it can fast become a foe. Data’s wacky wanderings of late have foiled many a forecast and contributed to an exaggerated, widespread sense of unease. International trade data were no exception, volatile right through the end of 2011. Do they give any hints of where global trade activity is headed this year?
Price movements are part of the turbulence. Although they matter deeply, prices can distort the real flows of goods and services that are occurring. Net of price fluctuations, the latest trade activity compared with the same point last year is still generally robust worldwide, with the exception of Europe. Cumulative numbers for 2011 compared with 2010 are far more impressive, up 6.2% with Central and Eastern Europe, Asia and the US leading the charge. So far, so good.
Given this picture, what do we make of scary press reports and the global fear-factor? Recent worries are in part a reaction to recent figures. Data toward year-end soured considerably, down 3.8% at annual rates in the final quarter, with one month of data pending. This is a significant setback, and has all but snuffed out export momentum heading into the New Year. Built-in growth heading in to 2012 is just 0.3%, compared with 3.9% at the same time last year. Troubling indeed. Read more here.
