Downturn in global trade adds to gloom
Global trade buckled suddenly in the second quarter as Europe flirted with recession and Asia came off the boil, while Canada’s bellwether economy contracted outright, adding to the darkening picture across the world.
By Ambrose Evans-Pritchard
Import growth in the large G7 economies and the China-led BRIC nations fizzled to 1.1pc compared to a 10.1pc pace in the first quarter, according to the OECD club of rich states.
In the UK the British Chambers of Commerce reduced its forecast for GDP growth from 1.3pc to 1.1pc for this year and from 2.2pc to 2.1pc in the next. It said prospects could improve “gradually”.
Holland’s World Trade Monitor said global commerce contracted by 2.2pc in June from the month before. Global trade volumes are back to levels seen in December of 2010, though the falls are not yet comparable with the dramatic collapse in late 2008.
Container Trade Statistics reports that shipping freight rates on the routes from Asia to Europe have dropped to almost zero as a dearth of goods meets a glut of vessels.
Canada’s economy shrank 0.1pc in the second quarter, hampered by wildfires in Alberta that hit the oil and gas sector and by disruption to Ontario’s car industry after the Fukushima nuclear disaster in Japan.