Global trade remains strong as international investment stutters

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A new study has found that globalism is strong and well in the world of international business, despite a turbulent period of trade conflict and political separation. 

The Global Connectedness Index (GCI), published by DHL, found that international flows were smoother than feared, with the annual barometer of global goods, capital, information and people flow showing only a slight overall dip for 2018. 

However, international investment has taken a hit, in part because of US tax policy changes aiming to repatriate earnings held overseas. 

Chief executive of DHL Express, John Pearson, commented that: “While current geopolitical tensions could seriously disrupt global connectedness, this 2019 update finds that most international flows have remained surprisingly resilient so far.

“Ultimately, what we’re seeing today is the evolution of globalisation, not its decline. Decision-makers need to be careful to not overreact to strong rhetoric or headlines.”  

And on claims that trade was shifting away from globalisation towards regionalism, Steven Altman of the NYU Stern School of Business said that: “Our analysis does not confirm a robust regionalisation trend. Instead, we see that the average distance across which countries trade has held steady since 2012.”

Read more: US imports from China drop 13% in 2019 as trade war continues

“While fraying relations between major economies could lead to a fracturing along regional lines, such a shift has not yet conclusively taken place.”  

The GCI report suggests that the outlook for 2020 remains stable with just a slight decline in trade intensity forecast.

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