Global Trade Index

Tradeshift’s Index of Global Trade Health Q2 2022

Fresh storm clouds gathering

Supply chain activity slowed for the second quarter in a row in Q2, dropping by a further 6 points against forecast estimates. That’s according to the latest Index of Global Trade Health from Tradeshift.

Order volumes on Tradeshift’s platform fell to further below expectation in Q2, sliding by a further 6 points following a 7-point drop in the previous quarter. The lack of fresh orders is beginning to impact suppliers, who had only recently been struggling to cope with surging demand. The number of invoices submitted by suppliers dropped by 7 points in Q2, the most significant slowdown in a year.

Orders might be softening, but Tradeshift’s analysis suggests costs have risen sharply since the beginning of the year. The average value of an invoice submitted on Tradeshift’s platform has increased by 11% since the start of 2022, compared to a more modest 3.5% rise in 2021.

Some of the current challenges are transitory, but that’s not the whole story. The bigger issues, including labour shortages, geopolitical tension, and energy transition, are structural. The cost of inaction will only increase over time.

An economic storm might be brewing, but it could well blow itself out quickly. Hold your breath now and you could well start to run out of air just as others are getting ready to accelerate.

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