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Trade Activity Forecast Shows Inflation to Keep Imports Elevated
Flexport’s Trade Activity Forecast augments traditional economic techniques for predicting U.S. merchandise imports with Flexport’s proprietary data. In the latest update we find that commodity price inflation will likely drive the dollar value of imports to new record highs throughout Q2’22.
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 due to the advent of the pandemic and the resulting shift in trade patterns away from historic averages.
Update May 17, 2022: To set the stage for the forecast, U.S. merchandise imports in March 2022 jumped by 26.4% sequentially on an unadjusted, Census basis according to U.S. Bureau of Economic Analysis figures. That left imports 25.1% higher than a year earlier, extending an 18-month run of growth on a year over year basis.
The Census-based, unadjusted Trade Activity Forecast calls for a 4.1% dip in merchandise imports in April on a sequential basis before a 7.0% increase in May, as shown in Figure 1. A major contributor to the volatility comes from industrial supplies, which includes oil products where prices have swung wildly during the Ukraine conflict, as discussed in prior Flexport research.
A sustained recovery in imports of commodities as well as wider supply chain inflation look to drive a 29.6% year over year increase in Q2’22 overall after a 22.6% rise in Q1’22.
The bigger question from a macroeconomic perspective though is whether the trend towards elevated imports seen since the depths of the pandemic will continue. To answer such trend questions requires seasonal adjustment (see Figure 2).
On a balance of payments, seasonally adjusted basis, imports are expected to rise by 1.2% in April versus March and rise by a 2.7% in May versus April. In nominal terms both the adjusted and unadjusted forecasts are set to remain at historically high levels throughout Q2’22.
The US Census Bureau will publish April 2022 data on June 7, 2022. The next update of the Flexport Trade Activity Forecast is scheduled for June 17, 2022.
Please direct questions about the Flexport TAF to firstname.lastname@example.org.
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.
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