U.S. trade activity showed signs of resilience in Q4 as order volumes recovered from a recent slump, according to new data from Tradeshift. In fact, order volumes across U.S. supply chains rose at 6 points above the expected range in Q4, marking the most substantial quarter-on-quarter acceleration in two years.
“Ordering patterns give us useful clues as to how businesses are viewing demand signals for the next six months,” says James Stirk, CEO, Tradeshift. “Should the overall upswing in order volumes persist into the next quarter, it could signify the nascent stages of an upturn in trade over the coming year.”
Key takeaways:
- According to Tradeshift’s latest Index of Global Trade Health, total trade activity across U.S. supply chains stabilized at 3 points below the baseline in Q4 having softened in the previous quarter. The apparent increase in momentum from new orders in Q4 suggests overall trade activity could climb back into growth territory in Q1.
- Trade activity in the United States continued to outperform other major economies in Q4. The company’s analysis of purchase orders and invoice traffic on its global platform shows global trade transactions growing at 4 points below the baseline in Q4. Globally, order volumes grew 5 points above the expected range in the final quarter of 2023, having tracked below expected levels for the preceding nine quarters.
- Transaction volumes across the Eurozone, which had fallen to 9 points below the anticipated level in the previous quarter, rose to 4 points below the expected level in Q3. Order volumes across the region tracked 3 points above the baseline in Q4. UK trade activity remained low compared to other markets with total transactions 5 points below the expected level. Order volumes grew at 1 point above the expected range in Q4.
“Our latest data suggests sentiment among businesses is improving, but it’s also important to remember that any growth we’ve seen in Q4 is coming from a low base,” says Stirk. “The protracted slowdown in orders we’ve seen in recent quarters has left a lot of ground to recover before demand starts to show any concrete signs of normalizing, While I’m cautiously optimistic, the outlook for 2024 remains heavily in the balance.”
