The global trade data, drawn from the Tradeshift network used by over a million businesses worldwide showed a one-point improvement in total transaction volumes, compared to the previous quarter.

Despite landing three points below the anticipated range in Q1, this marks the ninth consecutive quarter of growth, signifying a sustained upward trajectory after a period of “sluggish” activity.

Key highlights from the Tradeshift global trade Index:

China turnaround: Trade activity in China rose at the most significant rate in Q1. Transaction volumes grew at two points above the expected level, the highest in more than two and a half years.

US momentum: The US also continued gaining momentum in Q1, with total trade activity tracking one point above the baseline. Order volumes surged to seven points above the expected level, following growth of a similar level in the previous quarter.

Manufacturing recovery: Tradeshift sees growth coming in part from an uptick in demand across the manufacturing sector where trade activity tipped back into the expected range for the first time in a year.

Eurozone edges higher: Activity levels across the Eurozone improved to three points below the baseline in Q1 having sunk as low as nine points below that level just six months earlier. New orders grew at six points above anticipated levels.

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UK orders disappoint: UK trade activity improved to four points below the expected level in Q1, but order volumes were sluggish, tracking five points below expectations.

Despite the positive signs of recovery in orders, challenges remain for suppliers, particularly in terms of liquidity and to those looking to ramp up supply chain activity. Although invoice payment times have decreased since their peak in Q3 2022, suppliers still face a 6% longer wait compared to the pre-pandemic era.

James Stirk, CEO of Tradeshift, commented on the global trade findings and said: “We’re seeing successive quarters of strong order volume growth for the first time in two years. Demand levels seem to be recovering, but there’s still a fair way to go before we start to see a normalization. Recovery is likely to remain fragile over the short-to-medium term, with factors such as the Red Sea crisis and wider geopolitical uncertainty clouding the picture.”

Stirk emphasised the critical role of cash flow in supply chains, stating: “Cash flow is akin to fuel in supply chains and a lot of suppliers will be running on empty after two hard years.

“The longer suppliers have to wait to turn invoices into cash, the greater the likelihood that an influx of new orders starts to outpace the availability of working capital to fulfil demand.”

In response to these challenges, Tradeshift and HSBC are set to launch a new joint venture later this year, aimed at helping businesses accelerate access to working capital through a range of embedded financial services, including data-driven invoice financing.

Last week (12 April) the US trade organisation National Council of Textile Organisations (NCTO)’s chairman Norman Chapman said he believes “predatory trade behaviour” and “customs fraud” are some of the issues currently plaguing the domestic textile trade in the country.