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The CPB Netherlands Bureau for Economic Policy Analysis released its monthly report last week on world trade and world industrial production for the month of October 2013. Here are some of the highlights of that report:
1. World merchandise trade volume (adjusted for price changes) increased by 1.4% in October from September, and by 4.1% from a year ago to reach a new all-time record high in October (see blue line in chart above). On a month-over-month basis, import growth in October was 1.3% for both the advanced economies and the emerging economies, while export growth was higher in the emerging economies (1.9%) than in the advanced economies (1.1%).
2. On an annual basis through October, the volume of trade grew faster in the emerging economies than in the advanced economies for both exports (4.7% vs. 3.6%) and imports (5.4% vs. 2.9%).
3. At a new record high of 134.6 for the world trade index in October, the volume of global trade is now more than 10% above its previous cyclical peak of 122.2 in early 2008, and 37.3% above the recessionary cyclical low of 98 in May 2009.
4. World industrial production (adjusted for price changes) increased in October on a monthly basis by 0.2% to a new record high, led by monthly growth of 0.6% in the emerging economies which offset the -0.2% decline in the advanced economies in October (see red line in chart). On an annual basis, world industrial output increased 3.2% in October, with especially strong year-over-year output growth in the emerging economies of 4.2%, led by growth in the Emerging Asian economies of 7.1%. Factory output in the advanced economies grew by 3.2%, led by Japan with 5.1% growth, followed by the US with 3.4% growth. Manufacturing output in October was flat in the Euro area from a year ago (-0.1%) and declined by 3.5% in Africa and the Middle East.
5. At an all-time high index level of 121.7 in October, world industrial output is now 7.2% above its previous recession-era peak in February 2008 of 113.5, and 23.7% above the recessionary low of 98.4 in February 2009.
Bottom Line: World industrial output and world merchandise trade both reached new record monthly highs in October. The volumes of world output and trade are now both solidly above their previous peaks during the early months of the global slowdown in 2008 (by 10.1% and 7.2% respectively), suggesting that the global economy has now made a complete recovery from the 2008-2009 economic slowdown. At the forefront of the global economic expansion this year are the emerging economies, which experienced especially strong growth over the last year through October in both trade volumes (4.7% export growth and 5.4% import growth) and industrial output (4.1%). The complete recovery over the last several years in the global economy to new record highs for both global trade and global industrial output demonstrates the incredible resiliency of economies around the world to recover and prosper, even following the worst financial crisis and global economic slowdown in generations.
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