The Goods Trade Barometer has registered a reading of 100.7, an increase from its August figure of 99.1 and closely approaching the benchmark of 100. This development suggests a trend towards the stabilization of global merchandise trade volumes by the latter half of 2023, even as the landscape remains fraught with uncertainties stemming from inconsistent economic data and growing geopolitical tensions.
Serving as a composite leading indicator, the Goods Trade Barometer offers timely insights into the direction of global merchandise trade compared to historical patterns. Readings above 100 denote volumes that are exceeding typical trends, whereas figures below 100 indicate a potential decline in trade activity.
During the second quarter of 2023, the volume of world merchandise trade showed minimal growth, registering a 0.2% increase from the previous quarter but experiencing a 0.5% decrease compared to the year before. Expectations for the third quarter are more positive, potentially bolstered by an increase in GDP growth in the United States and China, in spite of the European Union’s economic stagnation impacting overall demand.
Trade growth on an annual basis for the fourth quarter is anticipated to be robust, in part due to a lower comparative base from the same quarter the previous year, which saw trade impacted by high energy costs, increasing interest rates, and disruptions caused by the pandemic. These trends align with the World Trade Organization’s (WTO) October 5, 2023 forecast, which projected a 0.8% growth in global trade volume for 2023. Though the forecast has remained consistent, the trade outlook now faces increased risks, particularly due to recent events in the Middle East.
The Barometer’s detailed components present a varied picture, with certain sectors showing strong performance above trend, notably in automobile sales and production (110.0) and electronic components trade (109.8). Conversely, indices for air freight (100.3), export orders (99.4), and container shipping (98.0) hovered at or slightly below the trend line. The raw materials index (95.6) notably fell below the trend, reflecting possible challenges.
The notable performance in the automotive and electronic components sectors is likely driven by a surge in global demand for electric vehicles, whereas the lower performance in the raw materials sector could reflect the impact of sustained high interest rates on the property markets.
The Goods Trade Barometer has registered a reading of 100.7, an increase from its August figure of 99.1 and closely approaching the benchmark of 100. This development suggests a trend towards the stabilization of global merchandise trade volumes by the latter half of 2023, even as the landscape remains fraught with uncertainties stemming from inconsistent economic data and growing geopolitical tensions.
Serving as a composite leading indicator, the Goods Trade Barometer offers timely insights into the direction of global merchandise trade compared to historical patterns. Readings above 100 denote volumes that are exceeding typical trends, whereas figures below 100 indicate a potential decline in trade activity.
During the second quarter of 2023, the volume of world merchandise trade showed minimal growth, registering a 0.2% increase from the previous quarter but experiencing a 0.5% decrease compared to the year before. Expectations for the third quarter are more positive, potentially bolstered by an increase in GDP growth in the United States and China, in spite of the European Union’s economic stagnation impacting overall demand.
Trade growth on an annual basis for the fourth quarter is anticipated to be robust, in part due to a lower comparative base from the same quarter the previous year, which saw trade impacted by high energy costs, increasing interest rates, and disruptions caused by the pandemic. These trends align with the World Trade Organization’s (WTO) October 5, 2023 forecast, which projected a 0.8% growth in global trade volume for 2023. Though the forecast has remained consistent, the trade outlook now faces increased risks, particularly due to recent events in the Middle East.
The Barometer’s detailed components present a varied picture, with certain sectors showing strong performance above trend, notably in automobile sales and production (110.0) and electronic components trade (109.8). Conversely, indices for air freight (100.3), export orders (99.4), and container shipping (98.0) hovered at or slightly below the trend line. The raw materials index (95.6) notably fell below the trend, reflecting possible challenges.
The notable performance in the automotive and electronic components sectors is likely driven by a surge in global demand for electric vehicles, whereas the lower performance in the raw materials sector could reflect the impact of sustained high interest rates on the property markets.
