EM export weakness to continue in 2019

EM export growth slowed sharply in November and the early signs are that the December figures will be even worse. Some of this was due to falls in commodity prices. But much of the weakness appears to have been concentrated in shipments of electronic products within Asian supply chains, perhaps reflecting a turn in the sector’s inventory cycle. Regardless of how this develops, further falls in commodity prices and slowing global growth mean that we think the recent weakness of emerging market exports is likely to be a sign of things to come.