National Bank of Canada’s analyst, Krishen Rangasamy, explains that while world industrial production decelerated during the third quarter, trade volumes jump.
Key Quotes:
“After grinding to a halt in Q2, global trade volumes bounced back sharply in the third quarter. Latest data from the CPB show trade volumes hitting an all-time high in August, well on track to grow in Q3 at the fastest pace since 2010. In contrast, world industrial output decelerated during the quarter.”
“This combination of solid trade and weak output suggests global inventories fell during the quarter. While that’s positive for future production and hence economic growth, we’re not celebrating just yet. Early results for Q4 do not point to a quick rebound in industrial output.”
“Exporters may be capping production and liquidating inventories ahead of an anticipated trade slowdown. The escalation of the U.S.-China trade war could indeed have ripple effects across global supply chains.”
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