Better things to come in 2015?

What can we learn from this? The first is that we should never use GDP as a measure or predictor of trade volumes at regional or country levels. As much as we would like to think that there is every reason to do so, in reality there is little evidence to support it.

There are much better ways to project trade many of which are leading indicators. GDP is a lagging one, and it is usually revised at least three times within a three month period and the differences between the first measure and the last can be significant. Sadly stock markets and some planners make decisions based on these unreliable estimates.

Looking back at 2014 we see that Europe, and particularly the Eurozone, stumbled into stagnation and in some cases back into mild recession. For that we have the German Chancellor to thank. Any fear of inflation resulting from a possible stimulus was wiped out be the creeping deflation, i.e. negative price increases, that reared its ugly head. Just ask the Japanese what they think of deflation.

The stagnation in Europe caused repercussions in Asia with Chinese growth slumping to 7% and possibly less in 2014. Not only did exports slump but so did imports of both consumer goods and raw materials. The US and the UK were the shining stars with relatively good growth.

Fortunately, consumers in Northern Europe and the US had had enough of stagnation and, fueled by lower unemployment in the US and the UK, there was enough confidence to get them shopping, thereby outperforming the GDP indicators.

Will this help improve the port throughputs in 2015? Possibly, but if Europe does not pull itself out of stagnation then we may well see a mild global recession again. Not a pretty sight.