Research Firm: Global Trade May Have Already Hit Bottom

Numbers released by Panjiva, a firm that tracks overseas suppliers, show an uptick of 2% in the number of global manufacturers shipping to the U.S. market in May. It is the third monthly increase in a row.

The firm reports a metric that tracks manufacturers that have suffered a 50% or greater decline in volume shipped to U.S. customers in the most recent three-month period, versus the same period a year ago. These manufacturers are on the Panjiva Watch List. "Significant manufacturers" are those that have shipped 10 or more shipments to the U.S. over the past year. "Significant buyers" are those that have received 10 or more shipments from overseas manufacturers in the past year.

According to Panjiva, the number of significant manufacturers appearing on its Watch List fell from 31% to 30% in May - a positive sign. In addition, the percentage of significant buyers doing business with a Watch List supplier in the preceding three months fell from 41% to 40% in May.

This suggests to Panjiva that global trade may have already hit bottom, and that "we are witnessing the first steps of a recovery in global trade." However, the firm points out that the uptick could be seasonal, and the increase is modest, suggesting that recovery will take time.

The firm also points out it expects the "absolute amount" of risk to remain high; we will likely continue to see supplier bankruptcies.