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Trade Activity Forecast Indicators

Trade Activity Forecast to Continue Double-Digit Growth in Q4

Flexport’s Trade Activity Forecast augments traditional economic techniques for predicting U.S. merchandise imports with Flexport’s proprietary data. Imports are expected to expand by 16% year over year in October and by 15% for Q4’21 overall.

The Methodology: The Flexport Trade Activity Forecast combines traditional economic statistics alongside Flexport’s proprietary data and analysis to generate a forecast of U.S. merchandise import growth. The use of additional data has been particularly important since the advent of the pandemic and the resulting shift in trade patterns away from historic averages.

U.S. merchandise imports in September continued their relentless expansion, rising by 18% year over year according to U.S. Bureau of Economic Analysis figures. That was modestly faster than the 15% increase expected in Flexport’s inaugural forecast published on Oct. 22.

The main driver in absolute and relative terms was a 56% rise in imports of industrial supplies, as shown in Figure 1 above. An acceleration of commodity prices compared to a year earlier was likely to be a major contributor. The revised Flexport TAF indicates the expansion will likely continue over Q4’21 with growth of 51% year over year.

Consumer goods imports expanded by 13% year over year in September, which was modestly slower than previous rates. An elevated preference among consumers for goods over services, estimated in Flexport’s Post-Covid Indicator, is set to continue in Q4’21. That may support a growth of 8% in Q4’21 with the potential for a subsequent slowdown.

The automotive sector has been the main area of weakness, with imports dropping by 16% in September after improving modestly in August. Continued shortages of parts, particularly semiconductors, are the main contributing factor. While automakers expect production to recover during Q4’21 the continued shortage of parts will likely continue to drag on imports in aggregate.

In aggregate, Flexport's Trade Activity Forecast calls for a slowdown in the growth of U.S. merchandise imports to 16% year over year in October, and overall growth in Q4’21 of 15%. Looking further ahead, a slowdown in January and February linked to normal seasonality and the Lunar New Year holiday is expected to be followed by a renewed expansion in demand.

The continued willingness of consumers to prioritize goods spending and the shift in corporate spending to rebuild inventories will be key determining factors of imports beyond that point.

Please direct questions about the Flexport TAF to economics@flexport.com.

Disclaimer: The contents of this report are made available for informational purposes only and should not be relied upon for any legal, business, or financial decisions. Flexport does not guarantee, represent, or warrant any of the contents of this report because they are based on our current beliefs, expectations, and assumptions, about which there can be no assurance due to various anticipated and unanticipated events that may occur. This report has been prepared to the best of our knowledge and research; however, the information presented herein may not reflect the most current regulatory or industry developments. Neither Flexport nor its advisors or affiliates shall be liable for any losses that arise in any way due to the reliance on the contents contained in this report.

Indicators

Indicator Release Date Release
Trade Activity Forecast November 17, 2021 View PDF
Trade Activity Forecast October 22, 2021 View PDF

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