Tradeshift Trade Index: Increase in Global Trading in Q4

Fresh data from trade commerce platform Tradeshift is indicating a modest increase in global trading activity in Q4.  The figures also show a noticeably strong flow of orders during the time period. 

The index shows world-wide trade transaction volumes were up to 4 points below the baseline number in Q4, having say 6 points below the expected levels in Q3.  The quarterly report of purchase orders and invoice traffic on its global e-commerce platform is showing a marked increase in activity during the time period, as order moved up 5 points above the forecast range.  This is compared to the data tracking below the expected levels for nine previous reporting periods.  

Tradeshift Trade Index US 

There are some noticeable differences between different regions in the data.  In the US the total volumes of transactions were becoming more stable, sitting three points below the baseline after becoming slightly weaker in the previous Q3.  The ordering landscape showed positivity, sitting six points above the forecast range, which is the biggest increase in the last two years of analysis.  

Tradeshift Trade Index UK 

Data was less positive in the UK, with trade activity remaining lower compared to other markets in the analysis with overall trade sitting 5 points below the forecast level for the time period. The order volumes reported grew just 1 point above the expected range in Q4.

Tradeshift Trade Index EU

The volume of transactions in the EU reporting region, which had fallen to 9 points below the anticipated level in the previous quarter, were much improved to rise to 4 points below the expected level in Q3. The volume of orders 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 climb in areas such as transport and logistics.”

Other key takeaways from Tradeshift Index of Global Trade Health 

The Tradeshift Index of Global Trade Health also takes in other key factors, such as the demand for freight capacity.  In Q4 it 6 points below the baseline figure, giving a strong indication the recent rise in orders observed at a macro level is not yet large enough to have a significant influence on the overall story of decline evident over the past year and a half. It is a similar pattern in manufacturing, as transactions across the sector remained consistent with the previous quarter, ending the year 6 points below the level forecast by research.  

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.”

What is the Tradeshift 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.

Read the report in full here.

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