Global Trade Volume Dropped in May

Global trade volume fell by 1.3 percent in May, compared with April based on preliminary data, according to the CPB Netherlands Bureau for Economic Policy Analysis.

The May decline was even higher than the declines of 1 percent in April and 0.4 percent in March, said the Dutch-based research institute. Over the January-May period, world trade fell by a cumulative 2.3 percent, following a drop of 16.8 percent from November 2008 to January 2009.

According to the report, world trade volume was down by 3.6 percent in March through May, compared with the preceding three months, December through February. The negative momentum in the three months through February was much bigger at negative 12.7 percent, however. Although no region has yet to show positive trade momentum, trade volume in Asia was close to stabilization, the report said.

World trade volume growth has been on a sharp downward trend through the last twelve months. Trend growth was negative 8.4 percent in May compared with the previous twelve months, down from the record growth rate of positive 9.9 percent in November 2006. The declines that have been recorded since February 2009 are the first declines since August 2002, CBP said. In May, world trade volume was almost 20 percent less than in the corresponding period of 2008.

Measured in U.S. dollars, not trade volume, world trade increased by 2.1 percent in May from the previous month, after rising by 0.4 percent in March. However, that's largely because energy prices rose in May by 15 percent over the previous month. In the three months through April, however, world trade prices were down by 0.9 percent from the preceding three months. This was a much lower rate of decline than the drop of 8.5 percent during the three months through February. During the three months through May, prices dropped 2.3 percent, measured in U.S. dollars.

Contact Alan M. Field at afield@joc.com.