The DHL Global Trade Barometer for January 2018 indicates that global trade will continue to grow within the next three months.

DHL yesterday introduced the new early indicator for the current state and future development of global trade.

On its initial release, the index scored 64, which is slightly below the values calculated for previous months. The score means that world trade is still considered to be expanding, but that growth has lost some momentum. The decline from previous months is due to weakening prospects for Chinese and Japanese trade, which is only partially offset by improved prospects for India, South Korea, and Great Britain. US trade is predicted to remain steady.

The global outlook for air trade has dropped by -2 points, but continues to predict positive growth with a value of 71. The drop is mainly due to a decline in US and German air trade. A similar picture emerges for worldwide containerized ocean freight. Compared to December, the index value is slightly down with -1 points. The main reason for this is a rather steep decline in Chinese ocean trade, with -7 points since November of last year; indicators for all other countries point upwards.

Trade in raw materials proves to be the current growth driver in overall global trade dynamics. Worldwide trade in basic raw materials is expected to grow strongest amongst all sectors evaluated. This is mainly driven by Indian and British imports, as well as both imports and exports by the US.

A strong growth projection for machinery parts and components ranks second, which is mainly driven by strong Chinese exports and imports, as well as high volumes of German imports. This is closely followed by trade in industrial raw materials. British, Japanese and Indian imports were the main drivers behind those developments.

Machinery parts and components emerged as the fastest growing sector for air trade, followed by high technology. The highest growth in ocean trade can be expected from trade in basic raw materials, followed –with some distance – by industrial raw materials.

The DHL Global Trade Barometer is based on large amounts of logistics data that are evaluated with the help of artificial intelligence. The indicator was developed in cooperation between DHL and Accenture and will be published quarterly.

The data is collected from international customs authorities by Seabury Consulting, which was recently acquired by Accenture. Accenture will provide data modeling and predictive analytics to forecast future trade trends for DHL.

The barometer is based on import and export data for a number of intermediate and early-cycle commodities that serve as the basis for further industrial production. Sources for the index are aggregated market data from air and containerized ocean freight in seven countries—the United States, the United Kingdom, South Korea, Japan, China, Germany, and India—which account for more than 75 percent of world trade. Using artificial intelligence and various statistical methods this data is compressed to a single index value, which is published on a global level and individually for the seven countries evaluated.

The DHL Global Trade Barometer index represents the weighted average of the current growth and the upcoming two months of global trade. An index value above 50 indicates a positive development; values below 50 point to a decline in world trade. Tests with historical data have revealed a high correlation between the DHL Global Trade Barometer and real containerized trade, providing a three-month forward-looking estimate.

The DHL Global Trade Barometer also provides deep insights into specific issues such the main macroeconomic factors that are affecting trade trends or the countries and regions that are driving global trade. By breaking down the global supply chain, volume trends within industry sectors could be identified, pointing to outperforming and declining sectors.

Tim Scharwath, CEO of DHL Global Forwarding, Freight expects that insights from the barometer will help DHL customers to optimize their business processes, providing guidance for investment and supply chain decisions. DHL will leverage the indicator to fine-tune its own resource planning for its international logistics operations.