In an article on the CNBC platform by Holly Ellyatt, there are some interesting comments about the OECD and its Chief Economist, Laurence Boone. According to research, trade growth was 5.5% in 2017 and today is is closer to the 2.0% level, with some regions weak, Europe being near zero percent. Boone said that trade and exchange are essential for both competition, innovation and employment.
“More than a third of the jobs in every single country are actually firms that export, ” she noted. Investment was growing more than 3.5% a year and today it is growing less than 1.7% a year and with investment fading, jobs fade as well. The OECD predicts that the global economy will grow by 3.2% in 2019 and 3.4% in 2020.
Our Views: The US-China trade war is forcing firms to divest from some countries and invest in others. Trade in all goods will likely come under pressure in 2020 as will shipments of energy/oil and gas, and food products. Imagine a world that has less energy and food, a world when all commodities do not move freely. In the 1930s, Japan and Germany fought wars for many reasons, but one was to gain access to commodities. Watch our last video on North America.