Monday, September 05, 2011

Chart of the Day: World GDP and Suez Canal Traffic

The chart above from The Economist displays annual world GDP growth and the annual growth in the amount of cargo passing through the Suez Canal in Egypt, representing about 8% of the total world trade. Making a simple forecast based on recent trends in cargo traffic, The Economist predicts that world GDP will fall from 3.8% in the first quarter to 3.3% in the second quarter.


At 9/05/2011 12:16 PM, Blogger Buddy R Pacifico said...

The Economist may be right in predicting lower global gdp but Suez Canal stats might be shaky.

According to the U.S. Energy Adminstration the Suez Canal, and specifically the southern Strait of Bab el-Mandab is a "Chokepoint" in petroluem and LNG shipping. Political unrest in the Egypt and other local countries make this Chokepoint a higher probability. Thus, shipping and sourcing may have changed away from the Suez.

Other key reasons are extensive piracy in the area and Europe gets much of its oil from Western Africa rather than the Mid-East, as before.

At 9/05/2011 5:33 PM, Blogger morganovich said...

is it just me, or does this relationship look pretty weak?

i don't have the raw data to run an R squared, but eyeballing this, there are some significant longterm divergences.

At 9/06/2011 2:55 AM, Anonymous Anonymous said...

They look similar enough to me, at least for the several years depicted.

At 9/06/2011 8:26 AM, Blogger Innovation rules said...

Stupid question.

Why is it intelligent to use a lagging indicator susceptable to political and environmental forces as a GDP predictor?

At 9/06/2011 9:10 AM, Blogger morganovich said...


i think you need to take a closer look.

during 03-04, gdp rose while suex dropped.

suez continued dropping into 05 while gdp flatlined.

suez was surging hard in 2002 while gdp dropped.

there are lots of negative r2 periods in this graph.

the relationship is not all that tight, it's just 2 series that both tend to trend positively.

actual variance correlation does not look high.

the whole period from 05-08 has gdp above trend and suez below trend.


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