Global Trade Index

Tradeshift’s Index of Global Trade Health Q1 2021

Tradeshift’s Index of Global Trade Health Q1 2021

April 20, 2021
Tradeshift Editorial Team


Beware the bullwhip as the economy springs back to life

  • Global B2B transactions grew 10.2% in Q1 with order volumes jumping 16.9%
  • Trade activity in the Eurozone grew 14.5% and increased 10.5% in the US
  • Manufacturing order volumes on the Tradeshift Network were up 80% year-on-year in March, but suppliers are feeling the effects of increased demand. 1 out of 5 suppliers struggle to meet the increase of orders

Our latest Index of Global Trade Health presents a broadly optimistic view of the year ahead. Orders are rising at double-digit rates as consumer demand continues to accelerate. Cumulative transaction volumes on our platform are tracking 38% above their pre-COVID levels in March of 2020.

The Eurozone may be struggling with its vaccine roll-out plan but that hasn’t stopped factories there from producing at record rates since the beginning of the year. Total transaction volumes across the region rose 14.5% in Q1. Trade activity in the US is also settling into a high-velocity rhythm. Even the UK, which had appeared stuck in reverse gear at the end of 2020, now appears to be turning a corner.

Economists are predictably becoming bullish about the speed of recovery. Our own research of sentiment among suppliers suggests that roughly two-thirds are more optimistic about their business prospects than they were at the end of 2020. But there are signs that supply chains are beginning to creak under a kind of pressure few were expecting when the virus first hit.

Manufacturing orders on our platform were up more than 80% year-on-year in March but low invoice settlement rates across the sector suggest money is not flowing through to suppliers to support a corresponding ramp-up in production.

The effects of this imbalance are well-publicized, from just-in-time automotive assembly lines forced to lie idle, to delivery companies scrambling to source cardboard packaging. The recent blockage of the Suez Canal provides a further reminder of how susceptible modern supply chains are to a single point of failure. 2021 might well prove to be the curtain-raiser on a golden period of economic growth, but sustaining the current momentum is going to require a far more flexible and collaborative relationship between buyers and suppliers than was evident prior to the pandemic


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