Is The Real Indicator Of The Global Economy In Africa?

Tyler Durden's picture

The WTO recently announced it expects global trade to fall again from 5% to only 3.7% growth - significantly lower than the 20-year average growth rate of 5.4%. But ThomsonReuters notes this week that their additional comment that 'severed downside risks' could put a further dent in growth rates could well have foundation in some very real data. Traffic through the Suez Canal - a key cargo transport route - has nosedived in recent weeks and months and is currently only just above the flat-line. While not a perfect indicator, given that 8% of world trade travel this route and the rising tensions occurring geographically, nevertheless the trends in global GDP growth and trade volumes have mirrored one another very closely and this downturn suggests considerably more contraction in global growth than even the most pessimistic of sell-side research shops believes is possible.

 

Source: ThomsonReuters

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GeneMarchbanks's picture

Egypt is going to be a problem for the tribe...

johnu1978's picture

I think you may be right.

-John
Primitive Skills Classes - Edible Plant Tours
http://www.heartrootnatureconnection.com

Pure Evil's picture

What's the Panama Canal's traffic rate?

dubbleoj's picture

do you have historical traffic numbers? YoY change is the story.

waaaaaaaaaaay too many letters that should be numbers in formulas in that panama canal traffic report, a phd students wet dream

Muddy1's picture

Exactly, the decline in Suez traffic is also reflecting civil unrest in the region and powderkeg situation in Syria and Iran, and the risk of being caught in the region when the missles, bombs, and BS start flying.

mkhs's picture

It looks to me like ths Suez canal began to lose traffic around 2004.  It is less important than it was.

JailBank's picture

We don't have a few Aircraft Carrier groups to send?

Desert Irish's picture

Yep what do you think is keeping the Suez Canal from flat-lining.....

Bicycle Repairman's picture

Yes.  Let's just send our fleet through the canal repeatedly.  Back and forth.  Get NATO, the Israeli's and Russia to do it as well.  Hell, invite Iran to do it, too.

Muddy1's picture

Four have already been sent creating a maritime traffic jam.

Sudden Debt's picture

Who would have guessed it... wasn't the BDI up from it's rock bottom?...

row... row... row that boat... and sell it for scrap iron...

 

Dr. Engali's picture

Compression trade bitchez!

insanelysane's picture

I believe the drop in Suez traffic has been offset by a surge in camel caravans utilization.

CreditcalMass's picture

Probably related to Iran no longer selling Oil to Europe...

SheepDog-One's picture

Yes but Irans oil exports are actually up.

Stuck on Zero's picture

They all go out the Southern way into the Indian Ocean.

Quinvarius's picture

I also think this has more to do with Iran than anything else, myself.

Vince Clortho's picture

It's that time of year when NW Passage shipping routes provide an intriguing alternative.

Quinvarius's picture

Why go directly to your destination via the Suez when you can detour over the North Pole instead?

goldinpenguin's picture

shipping traffic avoiding danger zone

Monedas's picture

The Suez Canal is not Africa....not really !  Is this a CNN like attempt to get some "African Voices" play ?   Monedas  2012   Comedy Jihad African Voices Are Boring

campag's picture

Pirates / Somalia      doh....

 

haskelslocal's picture

Overlay the 98 recession, tech boom/bust 2000, 911, Bush euphoria, 2008 bubble over this chart and the chart tells nothing.

In many ways 0 on this chart demonstrates a level of stability. So.... Not buyin' it.

blu's picture

Someone doesn't understand the idea of a common axis. Originate those two lines at zero and get back to me.

Bwahaha WAGFDSMB's picture

Someone doesn't understand the idea of rate of change.  Get back to me when you've taken Calculus.

blu's picture

This is chartology, not calculus, and is more akin to statistical analysis than rates of change. The arrow at the very end is a rough projection drawn from the chart itself, not derived from any rate equations. If the lines were originally drawn to begin together at the zero axis, they would overlap almost perfectly across the series (which is interesting) and converge at the end. The large dip in '09 where they would not overlap (which was arbitrarily selected to act as the zero-point instead of the beginning) could be interesting as well, but the down-arrow at the end would vanish as there would actually be no difference in the lines on the chart at that point. Certainly not anything of statistical significance. 

I have no real concerns either way. But I dislike visual manipulations of complex data sets for any purpose. The simple truth always serves us better, even if it is not very interesting. I've been noticing rather a lot of chart-stuffing on ZH of late, I wonder what that implies if anything. It may be a natural response to the chaotic noise now in the system, but if so then it is a poor choice indeed as the eye can infer the existence of order that is not there. For this reason it is very easy to befuddle people with charts and numbers, especially if the result is what they expect the hear.

I am always suspicious of anything that seems half-baked. There is enough of that coming from TPTB, I don't think the rest of us should continue the practice and in doing so, legitimize it.

Bwahaha WAGFDSMB's picture

It's a graph of "percent change on previous year".  The zero is not arbitrary, it represents no change.

carbonmutant's picture

Of course if traffic is falling you have to raise the transit rates to maintain the same level of revenue...

Nobody For President's picture

Say you have a full  tanker of crude in Jeddah, ready to sail to a US Gulf Port for refining. Anybody have any idea of the difference in insurance premiums between sailing North through the Suez vs. turning south and passing Somolia and through the Indian Ocean to get around the horn of Africa?

(ZHers are an incredibly diverse and knowledgeable lot.)

It seems to me that the Suez has to be high on terrorist radar - sink one tanker in that canal and world trade pukes for awhile...

But going past Somolia ain't a piece of cake either.

It is a dangerous part of the world out there right now - glad I'm not in the Merchant Marines.

plongka10's picture

Not much crude being shipped out of Jeddah - the oil is on the East Coast (Al Khobar, Dahran), not the West Coast. Hence the Carrier Groups based in and around Bahrain.

mt paul's picture

when is the Somalia yacht club regatta this year...

onebir's picture

Malacca Straits data might also be interesting; apparently 1/4 of world goods trade goes through there. (http://en.wikipedia.org/wiki/Strait_of_Malacca#Economic_importance)