Global Trade Activity Stabilizing Amid Signs of Two-Speed Recovery

US trade activity climbs higher, China’s recovery remains steady, the Eurozone begins to plateau, and Vietnam, India, Malaysia, and Mexico rise rapidly as supply chain diversification intensifies.

LONDON—17th July 2024—Tradeshift’s Q2 Index of Global Trade Health reveals that the recent recovery in global trade activity is beginning to level off, with notable disparities emerging between regions. While trade activity in the US and China continues to build on recent momentum, Europe is struggling to keep pace, and the UK is showing ongoing weakness.

Total transaction volumes between buyers and suppliers on the Tradeshift network remained flat compared to the previous quarter, with growth still three points below the anticipated level in Q2. Order volume growth dipped six points below the expected level, having peaked at five points above expectations at the end of 2023.

“Order volumes have been climbing rapidly over the last six months, but we’re now seeing the rate of acceleration begin to cool,” said James Stirk, CEO at Tradeshift. “This may well be the first indication that global trade’s recent resurgence is beginning to find its level, which may not necessarily be a negative.”

“We’re already seeing evidence of supply chains struggling to keep pace with higher demand. A more measured growth rate can provide suppliers with the breathing space needed to adapt and stabilize, reducing the risk of bottlenecks and disruptions that have plagued the industry in the recent past.”

Key regional and sector-based indicators from this quarter’s report include:

• US Maintains Momentum: Trade activity in the US exceeded expectations for the second consecutive quarter, with transaction volumes tracking one point above the baseline.
• China’s Steady Recovery: China’s trade activity continued to rise, exceeding expected levels by one point in Q2. This follows six months of steep decline in the second half of 2023, meaning recent growth comes from a fairly low base.
• Eurozone plateaus: Activity in the Eurozone remains three points below the baseline. Despite a bright start to the year, the region has not surpassed this level in over two years.
• UK Trade Slows: The UK saw a reversal in trade activity, with transaction volumes ending Q2 five points below anticipated levels, reflecting ongoing challenges in maintaining growth momentum.
• Emerging Market Winners: Countries such as Vietnam, Malaysia, India, and Mexico are emerging as significant beneficiaries from the shift in global supply chains. Transaction volumes in these regions are growing at rates well above the global average.
• Mixed bag across sectors: Manufacturing activity decreased slightly, while demand for freight capacity remained high. The retail sector continues to underperform, showing little change from its slow growth trend over the past eighteen months.
• Supply Chain Liquidity: While cash flow pressures on suppliers have eased, payment cycles remain 5% longer than pre-pandemic levels, posing ongoing challenges for small and mid-sized enterprises.

“Geopolitical tension and economic fragmentation are increasingly determining the shape of recovery,” added Stirk. “Winners and losers are now starting to emerge. At the business level, success means forging new trade relationships quickly while avoiding becoming tangled in a web of tariffs, taxes and ESG regulations. Digitalization is crucial in enabling companies to adapt to changing conditions.”

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About Tradeshift’s Index of Global Trade Health

Tradeshift’s Index of Global Trade Health analyses business-to-business transaction volumes (orders processed from buyers and invoices processed from suppliers) submitted via the Tradeshift platform to offer a perspective of how external events may be impacting business-to-business commerce in a variety of different regions and sectors across the globe.

About Tradeshift

Tradeshift is the B2B commerce and fintech platform that redefines how buyers and suppliers connect, trade and grow. The Tradeshift network connects over a million business users, enabling them to transact seamlessly and digitally with customers and suppliers worldwide. Our cloud-based platform combines e-invoicing, marketplace e-commerce, and embedded fintech services, providing businesses with tools to streamline finance and procurement processes, access new markets, source new suppliers, and optimize working capital—all in one place. Discover more at Tradeshift.com.