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1. 2010 GEORGIA LOGISTICS SUMMIT
National & International
Trade Outlook
Paul Bingham
Managing Director, Global Commerce and Transportation
IHS Global Insight
Cobb Galleria Center, Atlanta
April 29, 2010

2. Trade Demand Follows Recovery from Recession
• Trade demand recovery varies across a multi-speed world – Asia in
the fast lane, Europe in the slow lane, and the U.S. in between
• Debt levels influence the speed and shape of the recovery by region
and country, most visible now in Southern Europe
• Asia is increasing its role in generating global growth and this is
evident in patterns of U.S. and world trade
• The long-term downward pressure on the dollar exchange rate
remains, even as it appreciates against the euro in the near term
• Helps U.S. export competitiveness; dampens import demand
• Near-term U.S. trade recovery will moderate after inventories are
rebuilt; long-term trade volumes still grow faster than the economy
2
Copyright © 2010 IHS Global Insight. All Rights Reserved.

3. Trade volumes reflect goods production which is
more volatile than the economy as a whole
(Percent change)
9
6
3
0
-3
-6
-9
1974 1979 1984 1989 1994 1999 2004 2009 2014
Real GDP Industrial Production
Source: IHS Global Insight 3
Copyright © 2010 IHS Global Insight. All Rights Reserved.

4. In World Economic Growth by Sector,
Trade Fell the Most and Comes Back Strongest
(Percent change in real value)
8
4
0
-4
-8
-12
GDP Private Fixed Government Exports
Consumption Investment Consumption
2009 2010 2011 2012
Source: IHS Global Insight 4
Copyright © 2010 IHS Global Insight. All Rights Reserved.

5. Trade Shifts Vary with Industry Output by Region
(Percent change in industrial production)
15
10
5
0
-5
-10
-15
NAFTA Western Asia- Other Emerging Mideast-N. Sub-
Europe Pacific Americas Europe Africa Saharan
Africa
2009 2010 2011 2012
Source: IHS Global Insight 5
Copyright © 2010 IHS Global Insight. All Rights Reserved.

6. Trade Recovery by Commodity is Not Uniform,
as Stage of Recovery Varies By Industry Sector
• Manufacturing recovery best for Autos, Metals, Chemicals and
Commodities
• Output won’t reach pre-recession levels for several years
• High commodity prices challenge sectors that use them
• Strong recovery for Information, Technology and
Communications, recovering to former levels and above
• Banking / Finance stabilizes in U.S. (2010) and Europe (2011),
but recovery is affected by bad loans and de leveraging
• Commercial / consumer credit availability still constrained
• Continued, though select, push for infrastructure supports
trade related to transportation, communications and utilities
• Construction and related trade faces disappointing markets
6
Copyright © 2010 IHS Global Insight. All Rights Reserved.

7. Global Merchandise Trade Recovers by Next Year
(Trillions of U.S. dollars)
250
200
150
100
50
0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Air Sea Land/Other
Source: IHS Global Insight World Trade Service
7
Copyright © 2010 IHS Global Insight. All Rights Reserved.

8. The U.S. Recovery: Picking Up Steam
• Underlying 2010 U.S. GDP growth forecast near 3.0%
• Steep recoveries usually follow steep recessions, but recoveries
after financial crises are usually slower
• Consumer spending growth faces the headwind of still-high
unemployment, but spending is now the strongest in three years
• Business spending on equipment (and services) and inventory
rebuilding are boosting growth, as seen in freight and trade
• Non-residential construction and state-and-local spending will be a
drag on the recovery of the economy into 2011
• Housing construction will struggle to get off the bottom
• Excess capacity will restrain wage and price inflation
8
Copyright © 2010 IHS Global Insight. All Rights Reserved.

9. The U.S. Economic Recovery Advances
(Annual percent change) (Percent)
8 11
6 10
4 9
2 8
0 7
-2 6
-4 5
-6 4
-8 3
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Real GDP Growth (Left scale) Unemployment Rate (Right scale)
Source: IHS Global Insight 9
Copyright © 2010 IHS Global Insight. All Rights Reserved.

10. Industrial Production Outpaces Real GDP
(Percent change)
7.5
5.0
2.5
0.0
-2.5
-5.0
-7.5
-10.0
1990 1993 1996 1999 2002 2005 2008 2011 2014
U.S. Real GDP Industrial Production
Source: IHS Global Insight 10
Copyright © 2010 IHS Global Insight. All Rights Reserved.

11. Recovery Pace Varies by Business Size
Cyclical Indicators Rising; Small Business Lagging
ISM Diffusion Indexes, 50 = breakeven NFIB Index,1986=100
60 100
98
55 96
50 94
92
45 90
88
40 86
35 84
82
30 80
2007 2008 2009 2010
ISM Manufacturing ISM Non-Manufacturing NFIB Small-Business
Source: IHS Global Insight 11
Copyright © 2010 IHS Global Insight. All Rights Reserved.

12. Among U.S. Economic Growth by Sector
Fastest Growth in 2010 is in Trade
(Percent change)
2009 2010 2011 2012
Real GDP -2.4 3.0 3.0 3.3
Consumption -0.6 2.4 2.7 2.5
Residential Investment -20.5 0.8 27.5 22.5
Business Fixed Investment -17.8 1.7 7.6 11.9
Federal Government 5.2 3.8 -2.5 -3.4
State & Local Govt. -0.2 -1.2 0.4 0.6
Exports -9.6 11.9 7.8 7.3
Imports -13.9 10.2 7.9 6.6
Source: IHS Global Insight 12
Copyright © 2010 IHS Global Insight. All Rights Reserved.

13. U.S. Consumer Spending Growth: Durable Goods
Most Volatile, Strong Influence on Trade Volumes
(Percent change, chained 2005 dollars)
10
8
6
4
2
0
-2
-4
-6
2000 2002 2004 2006 2008 2010 2012 2014
Durable Goods Nondurable Goods Services
13
Copyright © 2010 IHS Global Insight. All Rights Reserved.

14. Inventory Cycle Boosts U.S. Exports and Imports
(Percent change annualized rate, volumes)
30
20
10
0
-10
-20
-30
-40
2007 2008 2009 2010 2011 2012
Real U.S. Exports Real U.S. Imports
Source: IHS Global Insight
14
Copyright © 2010 IHS Global Insight. All Rights Reserved.

15. U.S. Inventory Cycle Led to the Q4 Growth Spurt
(Annualized real rate of growth in U.S., Q/Q, percent)
6
4
2
0
-2
-4
-6
-8
2008 2009 2010 2011 2012
GDP Final Sales
Source: IHS Global Insight 15
Copyright © 2010 IHS Global Insight. All Rights Reserved.

16. Recession Impacts on Logistics
Trade recession led to underutilized U.S. logistics system capacity across
seaports, airports, terminals, railroads, trucking, warehousing and
labor. Providers reduced deployed capacity where they could.
Consequences:
• Trade recovery faces capacity bottlenecks; vessel and air cargo
capacity not back to pre-recession levels, despite size of idled
equipment fleet.
• Freight captured by truck from intermodal rail during recession likely to
shift back again, as rates and relative costs of trucking increase
• Still-improving intermodal rail service continues to capture line-haul
long-distance trucking, reducing trucking average length of haul.
• Continued evolution of trade gateways from shipper demands and
carriers optimizing operations and services
16
Copyright © 2010 IHS Global Insight. All Rights Reserved.

17. Thank you!
Paul Bingham
Managing Director, Global Commerce and Transportation
paul.bingham@ihsglobalinsight.com
202.481.9216