Manufacturing professionals know that uncertainty is part of the industry. They have to be ready when products are in short supply, prices go up, or when there are new impacts on international trade because of pandemics.
You have been working in this space for a long time, so you know that it is important to understand how supply chains work and what customers want. You also need to keep innovating while making sure the process stays efficient. There are always political, geographical, and technological forces at play in the global trade marketplace that can impact your business.
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We want to give you easy-to-read charts on international trade flows so that you can make better decisions for your business. Thanks to our extensive network of trusted partners, we collect highly accurate trade data from multiple sources worldwide. This way, companies like yours can see what is happening in global markets.
“If there’s one thing that’s certain in business, it’s uncertainty.” –Stephen Covey.
The Federal Group USA (TFG USA) compiled and analyzed trade data from the United States Customs Database* for inbound ocean freight from 2021 and 2022.
This data can help you understand what is happening in the market to make better decisions for your business.
Let’s look at the data from the first quarter of 2022 compared to the first quarter of 2021. We’ll look at it in 4 different ways:
As shown in Figure 1, imports are rising from all countries for 2022Q1 vs. 2021Q1. China, the leader in this category, saw a 34% increase in the total number of shipments.
Figure 2 tells us that imports of all materials are increasing. The leader, Steel, had an increase of 34%. Stainless Steel had the highest growth at 44%.
Figure 3 indicates an increase for all manufacturing methods for the first quarter of 2022 compared to a year ago. The only exception was a slight decrease in Stamping.
Casting, the most popular manufacturing method, exhibited a 12% increase. Increases for Forging, Machining, Extrusion, and Heading were 48%, 24%, 6%, and 4%. Stamping had only a modest decline of 4%.
Figure 4 displays a mix of increases and decreases in the categories shown. Automotive, the overall leader, delivered a 17% increase.
Industrial, Agricultural, and Pump saw increases of 51%, 21%, & 16%. Building, Mask, Medical, & Appliance experienced decreases with -3%, -11%, -13%, & -14%
Significant products in global trade—automotive, pump, industrial, and agriculture have all shown increases (ref. Figure 4). As the world starts to *unmask* travel by air and automobile is increasing. Automobile purchases are also rising as economic uncertainties diminish and pent-up travel demands are satisfied.
Most government stay-at-home orders that we experienced this time last year are over. Flights and road trips have increased. Families are finally taking vacations postponed for up to two years due to the pandemic.
The purchase of new automobiles (and the need for automotive parts to support them) are increasing now that some of the pandemic-driven economic uncertainties have subsided. Employers are also asking workers to return to the office.
As the pandemic worries soften, so does the demand for masks and other pandemic-related medical supplies.
Farmers have recently benefited from increases in crop and livestock prices. This would put the farming sector in a strong cash position, possibly accounting for the 21% increase in agricultural shipments for 2022Q1 compared to a year ago. However, more recent increases in fertilizer and fuel costs may be factors to watch closely
The labor market is tight right now. But U.S. agriculture is resilient and innovative, and these challenges only highlight the need for continued productivity growth to maintain the affordable food supply we have taken for granted.
Figure 3 indicates increased demand for products created from all manufacturing methods shown for the first quarter of 2022 compared to a year ago. This is good news for manufacturers.
The manufacturing industry is increasing, albeit at the slowest pace in almost two years, due to challenges with hiring people and getting supplies amid China’s recent COVID-19 resurgence. Therefore, manufacturers should mitigate risks by implementing machine learning, utilizing project management tools, and developing close relationships with supply chain experts.
Global trade, also called international trade, essentially means importing and delivering products and services over international boundaries. Importation is defined as importing goods that come into the country for sale. Goods leaving a country to be sold in another are called export.
Global trade data refers to the collection of import/export information worldwide.
In the past 20 years, world trade has increased by 6% each month, twice the rate in the previous decade. Trade has been a critical growth factor for the United States for a long time.
Global trade of total goods is expected to increase by 4.7% in 2022 over 2021 — approaching $6 trillion.
Globalization has made world economies more integrated, and international commerce dominates many world economies. This offers consumers multiple options and increases competition to encourage businesses to produce cost-effective and high-quality products which benefit the consumer.
International trade allows countries to extend their business and obtain goods or services they otherwise couldn’t access. The global market has become competitive. In the end, these changes create higher value and lower prices for the consumer.
International markets are important because they offer market diversification. Environmental events, political changes, and other risk factors can potentially impact a region not participating in global trade.
Firms in low-cost countries that engage in international trade help create better and higher-paid jobs for the workforce in that country.
International trade exchange rate competition, globalization, trade tariff barriers, transport costs, languages, cultural practices, and trade agreements influence companies’ global trade decisions.
The last few years have been difficult for most businesses, especially retail and e-commerce. We’ve seen prices go up, it’s been hard to get goods shipped, and there is much demand for goods from consumers. This means that businesses need systems that can quickly adapt to changing conditions in our global economy.
Outsourcing manufacturing to other countries will be an integral approach for companies wanting to stay ahead of the competition. Free trade and importation can allow businesses to reduce manufacturing costs while maintaining high quality. As a result, companies must work with competent supply chain experts with years of experience and a track record of delivering successful outcomes.
*(Note: TFG USA is not responsible for the accuracy of the data from the U.S. Customs database).
