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Seabury doubts 'new normal', faults protectionism, sees recovery ahead
THE Seabury Group consultancy says the GDP multiplier, which indicates how much faster the container trade grows compared to the general economy, is expected to increase if protectionist measures are reduced.
"I really believe that trade protectionism is a key reason for this multiplier going down," Seabury executive director Gert-Jan Jansen told the recent Containerisation International Global Liner Shipping Conference.
The average GDP multiplier has fallen to 1.8 over five years, Mr Jansen said, adding that historically its rate was between two and four. He did not think that today's low could be regarded as a permanent "new normal".
Mr Jansen pointed out that the GDP multiplier was down in the 1980s and in the early part of the last decade before rising again, reported Lloyd's List.
Protectionism was the cause of the fluctuation in trade rather than the rate of general economic growth, Mr Jansen said, adding that the number of protectionist measures increased 23 per cent between 2009 and 2012.
According to Seabury calculations, if the GDP multiplier falls to 1.5, container volumes will increase 4.6 per cent year on year in 2014. If it stays at 1.8, box volumes will increase 5.5 per cent, and if it increases to two, volumes will rise 6.1 per cent.
But there should be an improvement in the future as the number of protectionist measures are being reduced, he said.
Lesser influences on trade flow he said would be the increased complexity of supply chains. Nearshoring might move production closer to end markets but this may result in the movement of more raw materials to production points. Infrastructure developments could also facilitate growth.
"I really believe that trade protectionism is a key reason for this multiplier going down," Seabury executive director Gert-Jan Jansen told the recent Containerisation International Global Liner Shipping Conference.
The average GDP multiplier has fallen to 1.8 over five years, Mr Jansen said, adding that historically its rate was between two and four. He did not think that today's low could be regarded as a permanent "new normal".
Mr Jansen pointed out that the GDP multiplier was down in the 1980s and in the early part of the last decade before rising again, reported Lloyd's List.
Protectionism was the cause of the fluctuation in trade rather than the rate of general economic growth, Mr Jansen said, adding that the number of protectionist measures increased 23 per cent between 2009 and 2012.
According to Seabury calculations, if the GDP multiplier falls to 1.5, container volumes will increase 4.6 per cent year on year in 2014. If it stays at 1.8, box volumes will increase 5.5 per cent, and if it increases to two, volumes will rise 6.1 per cent.
But there should be an improvement in the future as the number of protectionist measures are being reduced, he said.
Lesser influences on trade flow he said would be the increased complexity of supply chains. Nearshoring might move production closer to end markets but this may result in the movement of more raw materials to production points. Infrastructure developments could also facilitate growth.
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