This is a chart that appeared in the Weekly Macro Themes (for subscribers to the institutional service), which I thought I would provide a quick update on given the September data is now out. The key message is that the global PMI trade orders subindex indicator is another sign pointing to a mild recovery in global trade growth in the coming months.
First a quick technical note on the indicator methodology - it comprises of the import and export subindexes of the manufacturing PMI for a representative set of countries. If manufacturers are seeing an increase in new export orders or expect to increase import orders across the countries in this indicator then it will show improvement and vis versa. The chart shows the indicator with a 4 month lead, so it is a leading indicator and provides a forward looking view of expected trade trends. While the indicator points to improvement in global trade growth it implies acceleration from the global trade slowdown of around 0% to about 2-3%, thus it's best described as a mild improvement. Still even mild improvement is welcome in a demand deficient slow-growth world.
Bottom line: The September manufacturing PMI data point to an improvement in global trade growth in the coming months.