Slide in shipping shows global recovery running out of steam

Europe’s woes are showing early signs of stalling the recovery of global trade.

The Baltic Dry Index, a measure of global shipping that is followed closely by economists, is suddenly raising red flags over the pace of the economic rebound. The reading released daily by the Baltic Exchange has been sinking every trading day for the past three weeks, measuring a 34-per-cent drop in ocean freight rates and foreshadowing a slowdown in trade.

The index declined 3.8 per cent Thursday to 2,784 points, reflecting the slump in the shipping industry’s prices to transport dry raw materials over 26 global routes. Economists watch the index because the amount of raw materials being shipped – from coal to grain to iron ore – provides a key indicator of consumption and manufacturing trends. (more)