Q4 2023 report
Is the Global trade upswing in Q4 indicative of a positive 2024?
Macroeconomic uncertainties remain reeling from Q3. But our Q4 report unveils a potential positive trend, hinting at a more optimistic 2024, with global trade activity improving to 4 points below the baseline.
Global trade outlook remains predictably unpredictable
In a world marked by rampant inflation, rising interest rates, geopolitical tensions, and disruptive weather events, businesses faced unprecedented challenges reaching the end of 2023.
The Tradeshift Index of Global Trade Health for Q4 sheds light on how major economies and industries are responding to these pressures, offering valuable insights for navigating the unpredictable terrain of global trade.
After a less-than-desired drop in Q3, Q4’s report reflected an upswing in trade activity and a surprising rebound in new orders, especially in the US and Eurozone.
James Stirk, Tradeshift’s CEO, concludes, “Though it’s too early to be certain, our latest data shows an upward movement that may well point to a more positive 2024 in front of us.”
Key findings
Q4’s report highlights some pivotal shifts in trade activity across the globe, becoming an essential component in our understanding of how businesses are moving into Q1 2024.
Order surge and supplier challenges
Order volumes, in freefall since 2022, saw a remarkable 5-point surge in Q4. While this surge indicates potential optimism, it poses possible challenges for suppliers.
Extended payment terms (often exceeding 120 days) and a lag in invoice volumes (3 points below the baseline) raise concerns about working capital pressure.
The true impact on global trade recovery ultimately depends on sustained order volume trends and innovative financing mechanisms.
Perspectives on the road ahead
Looking to Q1 and beyond, building resilience and swift decision-making strategies may be the backbone of a successful 2024.
Navigating choppy waters
Reflecting on the challenges ahead, global supply chains face choppy waters due to disruptions in critical trade corridors and the intersection of extreme weather and geopolitical tensions.
The term ‘permacrisis’ has become part of the lexicon.
On top of that, we face a year set to be amplified by elections in major economies, including the US, only further highlighting the loom of unpredictability.
As 2024 unfolds, businesses feeling compelled to maintain resilience and agility is crucial. Digitization emerges as a key strategy for enhancing risk management, fostering real-time information exchange, and enabling a higher velocity of informed decision-making.
Purpose and Methodology behind the Tradeshift Index of Global Trade Health
Understanding the Index
Tradeshift’s Index of Global Trade Health analyzes anonymized B2B transaction volumes on its platform, offering timely perspectives on how external events are impacting global commerce.
By acknowledging the complexity of global supply chains, the report serves as a valuable snapshot, complemented by third-party data and expert insights.
The methodology
The Index compares B2B transaction volumes against a baseline – one which is created by analyzing medium-term seasonal trends in the transaction data that flows across our platform – providing insights into sectoral and geographical volatility.
While small revisions may occur to enhance accuracy, the Index aims to offer an extensive understanding of global trade dynamics.
About Tradeshift: Redefining business commerce
Tradeshift is a leading business commerce platform, revolutionizing how buyers and suppliers connect, transact, and grow.
With expertise in e-invoicing, AP automation, and innovative B2B marketplaces, Tradeshift fosters economic opportunities worldwide.
The platform hosts a rapidly growing community of buyers and sellers in over 190 countries.
Past Reports
Q3 2023
Global trade had shown small signs of an uptick in Q2. There were whispers of green shoots pushing through the cracks, hinting at a possible rebound after an extended period of declining demand.
Q2 2023
Global trade has faced significant challenges in adapting to the realities of an economy scarred by a vicious circle of rampant inflation, rising instability, and unpredictable consumer spending patterns.
Q1 2023
Suppliers are feeling the impact of falling order volumes as buyers attempt to realign inventory volumes with changes in consumer spending.
Q4 2022
Rising costs and a slowdown in demand kicks off a new game and new rules for global trade. Global supply chain activity continued to fall against expectations in Q4, ending the year 3 points below the baseline.
Q3 2022
Can US supply chains remain immune to trouble from abroad?
Q2 2022
Inflation is more than a passing phase
Q1 2022
A new chapter in the age of uncertainty.
Q4 2021
Global trade passes the latest resilience test… for now at least.
Q3 2021
Recovery stalls on supply chain issues. Temporary pain or a bellwether of more disruptions to come?
Q2 2021
New normal? Supply chains adapted, but companies have yet to decide whether the economics of resiliency stack up.
Other Links
World trade gets a reality check
Q1 2021
Trade chasm: Has the Pandemic brought buyers and sellers closer together or pushed them further apart?
Other Links
As Trade Volume Increases, Survey Indicates that U.S. Suppliers Are Cautiously Optimistic
Will COVID Bring Buyers and Their Sellers Closer?
The Post-Pandemic Supply Chain: Looking Back to Move Ahead