- The goods barometer rose to 109.7, nearly 10 points above the baseline value of 100 and up 21.6 points year-on-year
- All component indices were above trend and rising, highlighting a broad-based recovery and signalling an accelerating pace of trade expansion
Global merchandise trade continues to recover in 2021 following a steep but brief drop in the second quarter of last year due to COVID-19, according to the latest World Trade Organization’s (WTO) Goods Trade Barometer.
The goods barometer, a composite leading indicator for world trade trajectory, rose to 109.7, nearly 10 points above the baseline value of 100 and up 21.6 points year-on-year.
The latest reading, released May 28, reflects both the strength of the current recovery and the depth of the COVID-19 shock last year, the WTO said.
In the latest month, all of the barometer’s component indices were above trend and rising, highlighting a broad-based recovery and signalling an accelerating pace of trade expansion.
Among the barometer’s component indices, the biggest gains were seen in export orders (114.8), air freight (111.1) and electronic components (115.2), all of which are highly predictive of near-term trade developments.
The strength of the automotive products index (105.5) may reflect improving consumer sentiment, since confidence is closely linked to sales of durable goods. This is also true of agricultural raw materials (105.4), which are mostly made up of wood intended for housing construction.
Finally, the strong showing for container shipping (106.7) is more impressive in light of the fact that sea shipments held up well during the pandemic and had less ground to make up as a result.
The relatively positive short-term outlook for trade is marred by regional disparities, continued weakness in services trade and lagging vaccination timetables, particularly in poor countries.
Global trade has been recovering since the second quarter of 2020, when the spread of the COVID-19 virus prompted lockdowns in many countries and triggered a steep drop in world trade. The volume of merchandise trade was down 15.5% year-on-year in the second quarter, when lockdowns were in full effect, but by the fourth quarter trade had surpassed the level of the same period in 2019.
“However, COVID-19 continues to pose the greatest threat to the outlook for trade, as new waves of infection could easily undermine the recovery,” WTO said.