Sun Kwang Newport Container Terminal in Incheon, South Korea. Video: SeongJoon Cho/Bloomberg
to Believe in
the Boom on
Asia’s electronics powerhouses and the Port of Los Angeles just gave three more reasons to believe that even with all the uncertainties around the global pandemic recovery, goods trade looks to be doing just fine.
Taiwan export orders posted another blockbuster print, rising 33.3% year-on-year in March. And over the past few weeks we’ve also gotten more affirmation of the semiconductor binge, with critical chipmaker TSMC reporting better-than-expected earnings and seeing the semiconductor crunch lasting into 2022.
South Korea’s first-20-day shipments surged 45.4% in April, due in part to a low base from a year earlier, but also revealing especially strong volumes and widespread demand by region and product.
Analysts at HSBC are seeing a still-strong 2021 for the electronics sector that’ll continue to lift Asia’s trade engines as well as global goods trade. “It’s not just semiconductors that are ’on fire’: broader demand for electronics, from consumer to industrial goods, keeps on strengthening,” they said in an April 14 report.
The Port of Los Angeles, for its part, exploded with imports in March, sending that gauge more than eight standard deviations above its long-run average. Ports globally are dealing with backlogs in unloading container ships (including in neighbor Oakland, where the backup is arguably worse), and it’s not just the Suez Canal squeeze that has them behind schedule. Demand is overwhelming the local labor and infrastructure needed to process it.
Elsewhere on Bloomberg’s Trade Tracker, we can expect some noise in year-over-year readings that are compared to abysmal second-quarter prints last year. But where base effects are not an issue, positive signs abound.
We’ve selected measures across shipping, sentiment and export volumes to watch for signs of stress amid the tensions. For the clearest indication, we measured how far each gauge is from historic norms.
How the indicators compare 👆
Latest data available for shipping, sentiment and export volume indicators, z-scores*
Port of LA Cargo
Processes about 40% of the world’s containers
World’s second-busiest port by volume
Hong Kong Port Cargo
A key North Asia trans-shipment port
Baltic Dry Index
Tracks changes in cost of moving raw materials
Business expectations of about 7,000 firms surveyed by IFO
U.S. New Exports
Exports outlook from 300 managers in 18 industries surveyed by ISM
China New Exports
Export views from 3,000 manufacturing firms
PMI of 150+ firms’ views on electronics exports
Country Export Volumes
Key export hub’s volumes for month’s first 20 days
Tracks key supply-chain hub for electronics
In addition to the 10 primary gauges, four price indicators provide another valuable glimpse into the global trade landscape, albeit sometimes in reverse as an increase in prices can be a sign of trouble. The coronavirus outbreak interrupted both supply and demand at the start of 2020, with Chinese factories halting production and orders slowing across the region as businesses and consumers grappled with travel restrictions, school and office closures, and uneven policy responses.
Cost of imported consumer and business goods
Chinese electronics export price changes
Eurozone PPI excluding construction
Commodities index, gives lead on Asia exports
Source: Data compiled by Bloomberg
Note: First published Nov. 5, 2018.
Bloomberg Economics compiled a group of critical global trade indicators across shipping, sentiment, exports and prices using input from economists and analysts within and beyond the company. The 14 gauges are each judged based on a z-score, or distance from their long-term average, with one standard deviation providing the upper- and lower-end range for a “normal” score. A z-score equal to 0 represents an average value.
Longer-run averages were calculated from January 2003 to December 2017 for all but four indicators. Korea Exports 20-Day started reporting in November 2004, IFO German Expectations and China PMI New Exports started reporting in January 2005, and China Electronics started reporting in January 2007. The averages for these indicators are from their earliest reporting through December 2017. Baltic Dry Index and CRB Metals are daily indicators, so the long-term average and standard deviation for each was calculated using daily data, while z-scores were calculated for the monthly average.
Index-level readings are employed for the sentiment indicators, as well as the Baltic Dry and CRB Metals Spot indices; all other gauges are judged by year-on-year growth.
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