Global goods trade and industrial production recover to pre-pandemic levels for the first time

Tue 26 Jan 2021
Posted by: William Barns-Graham
Trade News

Global trade in goods and industrial production returned to pre-pandemic levels for the first time towards the end of 2020.

The increase in volume of goods traded rose by 2.1% month-on-month in November, largely driven by rising demand for imports in advanced economies and due to China’s continually improving exports, the FT reports

Production up

Data from the Netherlands Bureau for Economic Policy Analysis’ World Trade Monitor, showed that world industrial production grew by 1.1% on a monthly basis.

The increase was largely concentrated in China, where factory output rose nearly 7%. By comparison, US industrial production was 5.4% below its November 2019 level, and the eurozone was 1.6% lower.

Upturn in 2021

World merchandise trade volume was forecast to fall 9.2% in 2020, according to the WTO. This prediction, in October, was more optimistic than earlier assessments of a 12.9% drop.

The WTO now predicts an upturn of 7.2% in 2021.

Poverty

However, the global economy will only just regain 2020 losses in 2021, according to a UN report seen by Reuters

The World Economic Situation and Prospects report by the UN Department of Economic and Social Affairs said the world economy would rebound by 4.7% after a retraction of 4.3% in 2020.

According to the UN, 131 million more people were pushed into poverty in 2020.

UK picture

In the UK, the latest ONS figures for trade showed a widening of the total trade deficit for November 2020, excluding non-monetary gold and other precious metals, growing from £0.6 billion to £1.5 billion.

Imports increased £2.4 billion (4.9%) and exports increased £1.9 billion (3.9%).