Global goods trade remained depressed in the first quarter of this year, but forward-looking indicators point to a possible turnaround in the second quarter, according to the World Trade Organization’s latest WTO Goods Trade Barometer.
The value of the barometer index rose to 95.6 in the latest reading – up from 92.2 in March – but remained well below the baseline value of 100, suggesting a below-trend stabilization and the beginnings of an upturn in merchandise trade volumes, the WTO found in its report released yesterday.
Mixed signals in the barometer's component indices nevertheless suggest that the road to trade recovery may be bumpy.
The volume of merchandise trade in the fourth quarter of 2022 was down 2.4 percent compared to the previous quarter and 0.8% compared to the same period in the previous year. The WTO attributed the slump to several related factors, including the ongoing war in Ukraine, stubbornly high inflation in advanced economies and tighter monetary policy globally.
The easing of pandemic controls in China starting in December 2022 appears to have boosted
port traffic in the country, but this was outweighed by reduced vessel traffic in Europe. Preliminary data suggest that trade remained depressed in the first quarter of this year, but the recent pickup in export orders points to an increase in demand for traded goods in the second quarter.
The barometer's component indices are currently mixed. The automotive products index (110.8) has risen firmly above trend on the back of strong sales in the United States and Europe. The highly predictive export orders index (102.7) has also returned above trend after a dip following the outbreak of war in Ukraine.
In contrast, the indices representing container shipping (89.4), air freight (93.5) and electronic components trade (85.2) all continue to signal weakness, the WTO reported. The index of raw materials trade (99), meanwhile, finished just below trend.
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