The Great Synchronisation: what do high-frequency statistics tell us about the trade collapse? WPTGS, 16-18 November 2009 Sónia Araújo and Eric Gonnard OECD Statistics Directorate
Objectives: Analysis of how the crisis is impacting trade flows using high frequency data Reflect on data improvements for a closer monitoring of trade flows
Outline 1. Aggregate trade indicators: Trade Turnover, X&M and synchronisation of growth in trade 2. Trade in Volume vs Trade in Value 3. Trade by Product: contribution of main SITC sections to the decline of Trade 4. Trade by Partner Region: main regional contributions to the decline of Trade 5. Trade in Goods vs Services: is there a decoupling?
Using MSIT and BoPs databases OECD Monthly Statistics of International Trade (MSIT) Merchandise trade, covering trade in goods but not services 4 types of data: Aggregate trade indicators; Volumes and unit value trade indices; Trade values by SITC sections; Trade values by partner countries From January 1960 onwards OECD Balance of Payments (BoPs) Statistical summary statement of transactions of economy with rest of the world Transactions (mostly) between residents and non-residents; Flows of goods, services, income, transfers, financial claims and liabilities Generally from 1995 onwards (some as from 1960) Databases in OECD.Stat, the OECD data warehouse http://dotstat.oecd.org/wbos/index.aspx
1. Aggregate Trade indicators Main points: At the aggregate level the drop in OECD trade is one the worst since mid-1960s Negative growth in OECD trade values are rare events At the country level, the drop is large and sudden. But the magnitude of the drop is less unique in an historical perspective Thus, it is the magnitude and the synchronisation of the declines that explains such a large drop in total OECD trade
Gulf war ERM crisis Emerging markets crisis Dot com crash 11 Sep 01 Econ Crisis 1 st oil crisis 2 nd oil crisis
Such drops in trade values are rare
Trade Decline by country Trade Turnover for selected OECD countries y-o-y monthly growth rates France Germany Japan UK USA Italy
Synchronisation of import values
Synchronisation of export values
2. Trade in Volumes vs Values Main points: The drop in trade volumes is slightly less dramatic than in values, though the downward trend is general In 2 OECD countries exports in volume grew while decreasing in value: Czech Republic and Ireland In 3 OECD countries the decrease in the volume of exports was higher than the decrease in value: Japan, Turkey and USA A rebound in export volumes is taking place in a few OECD countries: Finland, Ireland, Italy, Japan, Korea, Hungary, UK and Sweden; Belgium
Volume and Value index YoY variation (fixed 2000 US$ rate)
Volume and Value index evolution (2000 = 100), fixed US$ rate
Volume and Value index evolution (continued)
3. Trade by Product The growth rate of total X & M was decomposed by product as follows: M k Tot M M k j, t 1 K Products TOT, t 1 j 1, M M k j Main points: two product categories emerge as contributing the most to aggregate decline: Mineral Fuels Machinery and Transport Equipment
-40% Contribution to Exports growth and decline by SITC groups (reference periods for growth is 2008Q2/2007Q2, decline 2009Q2/2008Q2) 30% Other n.e.c Manufactured goods Chemicals and related products, n.e.s Mineral fuels, lubricants and related materials Machinery and transport equipment United States Germany Japan Growth Decline Growth Decline Growth Decline 20% 10% 0% -10% -20% -30%
-40% Contribution to Imports growth and decline by SITC groups (reference periods for growth is 2008Q2/2007Q2, decline 2009Q2/2008Q2) 30% Other n.e.c Manufactured goods Chemicals and related products, n.e.s Mineral fuels, lubricants and related materials Machinery and transport equipment United States Germany Japan Growth Decline Growth Decline Growth Decline 20% 10% 0% -10% -20% -30%
4. Trade by Partner region The growth rate of total X & M was decomposed by product as follows: M k Tot M M k j, t 1 K Countries TOT, t 1 j 1, N M k j Main points: except for the US-Asia relations, the declines are concentrated at the regional level
Contribution to Exports growth and decline by Partner (reference periods for growth is 2008Q2/2007Q2, decline 2009Q2/2008Q2) Other Middle East Asia Europe North America 30% United States Germany Japan Growth Decline Growth Decline Growth Decline 20% 10% 0% -10% -20% -30% -40%
Contribution to Imports growth and decline by Partner (reference periods for growth is 2008Q2/2007Q2, decline 2009Q2/2008Q2) Other Middle East Asia Europe North America 30% United States Germany Japan Growth Decline Growth Decline Growth Decline 20% 10% 0% -10% -20% -30% -40%
5. Trade in Goods vs Services: is there a decoupling? Main point: both goods and services series exhibit a synchronised decline in values X/M in the last quarter of 2008 and first quarter of 2009 In most OECD countries the decline in trade lasts more than 2 quarters For most OECD countries the decline in goods is sharper than the decline in services Some OECD countries register a shy recovery in trade values in the second quarter of 2009
In some OECD countries the decline is at similar rates: 110 Korea BoP-M-Services BoP-X-Services BoP-M-Goods BoP-X-Goods And also 100 90 New Zealand Norway Poland 80 70 60 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 2009Q2
110 100 90 80 70 60 while in others the decline in goods USA is sharper BoP-M-Services BoP-X-Services BoP-M-Goods BoP-X-Goods 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 2009Q2 And also Euro Zone Belgium Canada Czech Republic France Italy Japan Netherlands Portugal Spain Sweden Switzerland
More than 2 Quarters of negative growth.. 110 100 90 80 70 60 UK BoP-M-Services BoP-M-Goods BoP-X-Services BoP-X-Goods 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 2009Q2 And also Belgium Czech Republic Denmark France Italy Netherlands Norway New Zealand Poland Portugal Spain Sweden
A Rebound? Germany BoP-M-Services BoP-M-Goods BoP-X-Services BoP-X-Goods 110 100 90 80 70 60 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 2009Q2 And also Austria Belgium France Hungary Ireland Italy Netherlands New Zealand Portugal Spain Sweden UK
A rebound? latest available data 210 190 170 150 130 110 90 70 50 Total merchandise trade in US$ billion (Seasonally adjusted data) Imports Exports United States G7 560 510 460 410 360 310 260 145 Germany 75 Japan 135 70 125 65 115 60 105 55 95 50 85 45 75 65 40 35
Summary 1: data analysis The magnitude of the fall in total OECD trade values is unique This is due to a strong synchronisation in the decline of trade across countries However, the drop in volumes is generally less sharp Machinery and Transport Equipment, followed by Mineral Fuels are the two main contributors to the decline in total trade The decline in bilateral trade in region-specific, except for the US-Asia trade relations The decline in trade in goods is mirrored by the decline in trade in services, although trade in services has been more resilient in most OECD countries
Summary 2: Data needed Timely information Trade in Goods: cross country comparable data on volumes Harmonisation of product categories Disaggregation by product and partner country A matrix of bilateral trade by product categories Trade in Services More disaggregated data
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