World merchandise trade growth dipped in the fourth quarter of 2022 and, while it is likely to remain weak for now, an uptick in trade in some sectors appears to be on the cards in the coming months.
This is according to the latest World Trade Organization Goods Trade Barometer, which reflected weakening trade growth in volume terms after falling to 92.2 in the fourth quarter of 2022, down from 96.2 the previous quarter and below the baseline value of 100. The Goods Trade Barometer provides real-time information on the trajectory of merchandise trade relative to recent trends, with values greater than 100 signalling above-trend trade volume while values less than 100 suggest that goods trade has either fallen below trend or will do so in the near future.
Preliminary data suggest that the merchandise trade index will follow the barometer index down once quarterly trade volume statistics for the fourth quarter are released. The barometer index finished below the merchandise trade volume index, which stood at 106.6 in the third quarter due to resilient exports in Europe and the Americas.
“The volume of world merchandise trade was up 5.6% in the third quarter of 2022 compared with the same quarter in the previous year. Meanwhile, cumulative year-on-year growth for the first three quarters of 2022 stood at 4.4%, above the WTO's forecast released last October of 3.5% for the whole year,” the WTO said in a statement.
A downturn in the fourth quarter would bring actual trade growth more in line with the WTO's forecast for 2022. However, the WTO said any slowdown might prove to be short lived because container throughput in Chinese ports and new export orders from Purchasing Managers' Indices had already started to pick up.
“All of the barometer's component indices have fallen below trend except for the automotive products index (105.8), which was buoyed by above-trend sales and production figures for the United States, Europe and Japan, outweighing declines in China. The export orders index (97.4) remains below trend but is rising, hinting at a possible upturn in the near future. On the other hand, indices for container shipping (89.3), air freight (87.8), electronic components (84.9) and raw materials (92.0) are all below trend and declining, suggesting that weakness in trade is broad-based, impacting many sectors,” the WTO said.
