US Trade Activity Shows Resilience Amid Challenging Global Conditions
SAN FRANCISCO – July 19th, 2023 – Transaction volumes across US supply chains grew at their fastest pace in more than two years as domestic trade activity showed renewed signs of resilience following a recent slump.
Data from Tradeshift’s Q2 Index of Global Trade Health shows that the volume of new orders and invoices exchanged between US buyers and their suppliers grew at 3 points above its expected range in Q2, recovering from a level of 6 points below the baseline in the previous two quarters.
“We saw order volumes starting to tick up in the US last quarter as supply chains worked their way out of a bullwhip cycle,” said Christian Lanng, CEO and Co-founder at Tradeshift. “Conditions are still challenging, but the combination of a strong domestic market and high consumer confidence could well give US supply chains enough fuel to ride out the current storm.”
Emerging signs of stability in the US contrast with a more uneven global picture. Total transaction volumes across the Tradeshift platform grew at 4 points below the expected range, a modest improvement on the 5-point deficit in Q1, but nonetheless evidence of a trading environment that remains sluggish.
The Eurozone and the UK followed the global trend, with trade activity in the Eurozone 3 points below expectations in Q2 compared to a score of -8 in the previous quarter. In the UK, transaction volumes grew at 5 points below the baseline in Q2 compared to -7 points in Q1.
The decline in global demand has impacted the pace of China’s recovery following its lifting of COVID restrictions at the beginning of the year. Transaction volumes between Chinese buyers and suppliers rose at 1 point above the expected range, indicating progress that is more steady than spectacular.
Globally, order volumes stayed flat at 2 points below the expected range in Q2 and appear to be settling at that level. Key sectors, including transport and logistics, and manufacturing, also appear to be settling into a lower rhythm after consecutive quarters of steeply declining activity. Invoice volumes fell more sharply in Q2, suggesting that supply chains are having to adjust to the prolonged drop in orders.
“For suppliers, a slowdown in orders is manageable so long as it’s predictable,” said Lanng. “The restriction in access to financing that often accompanies economic uncertainty is far more damaging. Helping small businesses unlock trapped liquidity is among our topmost priorities.”
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.
Tradeshift is the business commerce platform that redefines the way B2B buyers and suppliers connect, transact and grow. We’re a leader in e-invoicing and AP automation, offering tools for compliant e-invoicing in 50+ countries, including China. We’re also an innovator in B2B marketplaces and embedded fintech services that bring value, opportunity, and growth to any business that joins the network. Tradeshift’s vision is to connect every company in the world, creating economic opportunity for all. Today, the Tradeshift platform is home to a rapidly growing community of buyers and sellers operating in over 190 countries. Find out more at: www.Tradeshift.com
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