Home Business NewsBusinessBusiness Growth News Trade activity showed a modest improvement in Q4

Trade activity showed a modest improvement in Q4

by Amy Johnson LLB Finance Reporter
17th Jan 24 11:33 am

New data from Tradeshift suggests UK trade activity remained in contraction territory during Q4 despite better-than-expected growth in orders during the quarter.

According to Tradeshift’s latest Index of Global Trade Health, transaction tracked 5 points below its baseline range in Q4 having slumped to 6 points below the expected level in the previous quarter.

The modest uptick in momentum stemmed from a surprise jump in new orders during Q4. Tradeshift’s analysis of purchase orders and invoice traffic on its global platform showed order volumes in the UK growing at 1 point above the expected range in Q4, the first time in two years that new orders have exceeded the forecast range.

The uptick in orders across the UK was consistent with the global trend that emerged in Tradeshift’s Q4 data. Global trade transaction volumes grew at 4 points below the baseline in Q4, having slumped to a 6-point deficit in the previous quarter. Globally, order volumes grew 5 points above the expected range in the final quarter of 2023, having tracked below expected levels for the preceding nine quarters.

Major economies in the West also appeared to mirror the global pattern. In the US, total transaction volumes stabilized at 3 points below the baseline in Q4 having softened in the previous quarter. Orders in the US rose at 6 points above the expected range in Q4, marking the most substantial acceleration in two years.

Transaction volumes across the Eurozone, which had fallen to 9 points below the anticipated level in the previous quarter, rose to 4 points below the expected level in Q3. Order volumes across the region tracked 3 points above the baseline in Q4..

“Ordering patterns give us useful clues as to how businesses are viewing demand signals for the next six months,” said James Stirk, CEO, Tradeshift. “If order volumes continue to rise in Q1, then we should start to see activity levels begin to move higher in key bellwether sectors including manufacturing and logistics.”

Demand for freight capacity remained 6 points below the baseline in Q4, suggesting that the recent rise in orders observed at a macro level is not yet significant enough to alter the overall pattern of decline evident over the past eighteen months. Similarly, transactions across the manufacturing remained consistent with the previous quarter, ending the year 6 points below the anticipated level.

After a relatively solid start to the year, trade in China also stayed in contraction territory, showing only modest signs of improvement from a mid-year slump. Transaction volumes across local supply chains grew at 5 points below the baseline in Q4, compared to a 6-point deficit in the previous quarter.

“The protracted slowdown in orders we’ve seen in recent quarters has left a lot of ground to recover before demand starts to show any concrete signs of normalising,” said Stirk. “Our latest data suggests sentiment among businesses is improving, but any growth we’ve seen in Q4 is coming from a low base. While I’m cautiously optimistic, the outlook for 2024 remains heavily in the balance.”

Leave a Comment

You may also like


Sign up to our daily news alerts

[ms-form id=1]