According to the latest HSBC Global Connections Trade Report:
Trade optimism among U.S. business leaders is at an all-time high and the U.S. is positioned to retain its dominance as a global technology export leader, including in industrial machinery, for the next twenty years, according to research by HSBC.
Two-thirds of manufacturers, wholesalers, and retailers expect trade volumes to grow in the next six months. However optimism often does not have a high correlation with the future events. Trends (not optimism) is a better metric to project the future, as trends continue until they don’t. Optimism is, well, just being hopeful. Bottom line, even with trend following there is no technique which one can rely on to accurately foresee future events. And hope is the least of the sorry tool set.
What are the current trends in export trade? The red line in the graph below shows the rate of growth.
There is really no growth trend other than flat (the rate of growth being constant) for the last 12 months. The three month rolling average is marginally decelerating whilst the six month rolling average is marginally accelerating. (Rolling averages not shown.)
I try to imagine what dynamic could manifest where countries would need to import more – imports and economic expansion generally go hand-in-hand. No one seems to be projecting a global growth spurt. Also one should note that USA export prices are deflating (current rate of deflation = 1.1% year-over-year) – which would currently add to the growth rate in terms of inflation adjusted dollars.
The above graph is updated through January 2014, and we do have a window intoFebruary from Los Angeles / Long Beach container counts. Container counts are good indicators of economic growth because that number is a non-monetary measure, the data comes almost in real time, there is no backward revision – and there is a good historical relationship between trade and economic growth.  Few econometrics have so much going for them.
