A quarterly report from the World Trade Organisation has signalled a slowdown in global trade, just a month before the UK is due to leave the European Union.
Every quarter the WTO’s ‘World Trade Outlook Indicator’ collects information on seven key drivers of international trade, including indices for export orders, container port throughput and international air freight.
The latest report showed a reading of 96.3, with any reading under 100 indicating below-trend growth in trade – i.e. a slowdown. 96.3 is the weakest such reading since March 2010 and down significantly from the 98.6 reading in November.
A statement from the WTO said:
“This sustained loss of momentum highlights the urgency of reducing trade tensions, which together with continued political risks and financial volatility could foreshadow a broader economic downturn.
“Indices for export orders (95.3), international air freight (96.8), automobile production and sales (92.5), electronic components (88.7) and agricultural raw materials (94.3) have shown the strongest deviations from trend, approaching or surpassing previous lows since the financial crisis”.
The WTO had previously forecasted this slowing of global trade growth and warned that whether it rebounds or steepens is dependent on policy decisions from governments.
A significant moment for global trade
International trade has been back on the news agenda due to rising trade tensions between the United States and China, and of course the ongoing Brexit debate. China and the USA are continuing talks to resolve their trade differences, while the nature of the UK’s departure from the EU remains uncertain, with the threat of disruption from a ‘No Deal’ exit looming.
At this juncture, it has never been more important for businesses of all shapes and sizes to look carefully at their export procedures. For British businesses in particular, preparing for changes in the international trade landscape is a vital task.
The Institute of Export & International Trade is on hand to provide training, education and information to help businesses brace themselves for potentially choppy waters ahead.
Further reading:
WTO warns of global trade slowdown as indicator hits nine-year low - Reuters