Tradeshift Reveals US Trade Growth Whilst UK Declines

Tradeshift has presented a valuable glimpse into the current state of global trade in its Q2 Index of Global Trade Health.

The B2B commerce and fintech platform aims to redefine how buyers and suppliers connect, trade and grow. Its network connects more than a million users, enabling them to efficiently and seamlessly transact with customers and suppliers worldwide. 

In its latest Index, the company has revealed key insights including:

• Trade activity in the US continues to climb, while China’s recovery remains steady.
• The Eurozone’s activity has plateaued, and the UK is facing ongoing weakness.
• Vietnam, India, Malaysia, and Mexico are rapidly rising as key players in global supply chain diversification.

The findings: US growth, UK decline

Tradeshift's Index of Global Trade Health examines the volume of business-to-business transactions processed through the Tradeshift platform, providing insights into how external events may be affecting B2B commerce across various regions and sectors worldwide.

The index has highlighted that the recent recovery in global trade activity is starting to plateau, with significant differences emerging between regions. 

Overall transaction volumes between buyers and suppliers on the Tradeshift network remained steady compared to the previous quarter, with growth still three points below the anticipated level in Q2. Order volume growth fell six points below the expected level, after 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,” says 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 stabilise, reducing the risk of bottlenecks and disruptions that have plagued the industry in the recent past.”

The findings also found that global trade activity is showing signs of stabilisation, though the recovery pace varies by region and sector.

In the US, trade activity has surpassed expectations for two consecutive quarters, with transaction volumes slightly above the baseline.

Similarly, China’s trade activity has seen modest growth, rebounding by one point in Q2 after a significant decline in the latter half of 2023.

In contrast, the Eurozone remains stagnant, with activity consistently below the baseline for over two years. The UK faces a downturn, with trade volumes falling five points short of projections, highlighting persistent growth challenges.

Meanwhile, emerging markets like Vietnam, Malaysia, India, and Mexico are experiencing robust growth, driven by shifts in global supply chains, with transaction volumes outpacing global averages.

Sector-wise, manufacturing activity has dipped slightly, although demand for freight capacity remains strong. The retail sector continues to struggle, maintaining its slow growth trajectory over the past eighteen months.

Supply chain liquidity has improved somewhat, but payment cycles are still 5% longer than pre-pandemic levels, creating ongoing difficulties for small and mid-sized enterprises. 

Focus on: Procurement

"Free trade has largely defined the global economy in recent decades. Today, however, geopolitical tensions and economic fragmentation have placed new demands on the finance, procurement, and supply chain management functions of large, global businesses," says James. 

"The technological gap in Purchase to Pay (P2P) systems is a significant issue in an environment where agility and precision are crucial. 

"The benefits of getting this right are clear, however. Integrating procurement and finance effectively can automate routine tasks and speed up transaction cycles.

"Real-time data and analytics provide comprehensive insights into procurement activities, spending patterns, and supplier performance, allowing businesses to make informed decisions and anticipate disruptions.

"Timely and reliable payments facilitated by an integrated P2P system help maintain strong supplier relationships. Advanced P2P solutions are scalable and adaptable, essential in a dynamic global market.

"Additionally, P2P systems streamline compliance with procurement policies and regulatory requirements, reducing the risk of fraud and legal issues.

"At Tradeshift, we are committed to ensuring that every business can access technology and tools to handle change.

"With this goal in mind, we have developed a dedicated purchase-to-pay offering for mid-market organisations, delivering all the benefits of a fully digitised P2P environment within 90 days," he concludes. 

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