The World Trade Organization’s (WTO) global trade in goods barometer has hit a record high of 110.4 – the highest since it was launched in July 2016 and up by more than 20 points year-on-year.
Each of the barometer’s measures showed above-trend growth – including air freight (114), container shipping (110.8), raw materials (104.7), and automotive products (106.6).
The automotive sector’s growth comes despite the global semiconductor shortage.
Growth slowing
The WTO said the latest report is consistent with its forecast from March that world merchandise trade will grow by 8% this year, following a 5.3% drop in 2020.
According to the WTO: “The rise in the barometer reflects both the strength of current trade expansion and the depth of the pandemic-induced shock in 2020.”
However, scoring at 109.3, the export orders index “has slowed more definitively, providing a further indication that the pace of recovery is likely to decelerate in the near term,” it said.
Beware downside
The WTO warns that the outlook for world trade continues to be overshadowed by downside risks – including regional disparities, continued weakness in services trade, and lagging vaccination timetables, particularly in poor countries.
Covid-19 continues to pose the greatest threat to the outlook for trade, it said.
The barometer is a composite leading indicator providing real-time information on the trajectory of merchandise trade relative to recent trends ahead of conventional trade volume statistics.
Other reports
Recent reports on the global economic recovery have presented a mixed picture.
Bloomberg recently predicted that growth would continue in Q3, albeit with some countries benefitting more than others.
However, an OECD report last week said the recovery was running out of steam with Covid spikes depressing consumer spending.
Split
An IMF report last month said the global recovery would split the world into two blocs: almost all advanced economies, that can look forward to normalisation of activity later this year, and those that will face resurgent infections and rising Covid death tolls.
It predicted the global economy is projected to grow 6.0% this year and 4.9% in 2022.