Commodity prices continue to rise. Over 650,000 tonnes of grain (mainly corn) have been exported from Ukrainian ports so far this month under a safe-passage deal, while gas flows via the Nord Stream pipeline are currently tracking at around 20% of full capacity as at 23 August 2022 and will cease for three days from 31 August for further (previously unscheduled) maintenance. And surging energy costs are impacting trade balances: the UK goods and services trade deficit widened to the largest on record (GBP27.9bn) in Q2 2022, while Japan’s goods trade deficit hit an all-time high in July (JPY2.1trn). However, some countries, including Norway and Canada, are benefiting from higher prices for their energy exports.
Leading indicators are pointing to a potential slowdown in trade. Global new export orders declined for the fifth consecutive month in July, while the US National Retail Federation expects containerised retail import volumes to fall by 2.3% y-o-y over August to December (i.e. during peak container shipping season). New export orders for Taiwanese electronics also tumbled in July as customer inventories continued to grow.
Data mining earnings calls. And these trade issues, along with recessionary concerns, remain top of mind for businesses. Natural Language Processing analysis by our Data Science team finds that “inventory” and “freight” were key topics in recent company earnings calls, while discussions around “shortages” have become less prominent for North American firms – perhaps indicative of some normalisation in supply chain strains post-pandemic.
Key terms in discussions on “supply chain” in Q2 2022 earnings calls