Manufactured goods trade makes partial recovery in Q3

Manufactured goods trade makes partial recovery in Q3

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  • Global trade in manufactured goods was down just 5% in the third quarter of 2020 compared to a year ago
  • Computers and electronic components saw double-digit trade growth in Q3
  • Textiles trade remained vigorous, boosted by demand for face masks
  • Trade in automotive products accelerated on the back of pent-up consumer demand

World trade in manufactured goods was down just 5% in the third quarter of 2020 compared to a year ago, bolstered by the partial recovery of commodities led by electronics, textiles and automotive products, new World Trade Organization (WTO) statistics showed.

The third quarter’s 5% decline improved upon the second quarter’s 19% shortfall as production resumed and lockdown measures were eased in major economies.

However, despite the substantial improvement in recent months, merchandise trade is still well below 2019 levels, said WTO.

Computers and electronic components saw double-digit trade growth, as did textile shipments, which were boosted by demand for face masks.

Trade in automotive products accelerated in the third quarter on the back of pent-up consumer demand, from a 19% contraction year-on-year in July to only 8% lower in September.

For the entire third quarter, automotive shipments were down 13% compared to last year, a better outcome than the second quarter’s 53% contraction year-on-year due to both supply disruptions and plunging demand early in the pandemic.  

Clothing shipments were down just 4% year-on-year in September as imports picked up in North America and Europe, as compared to being down 15% in July year-on-year.

Trade in toys, games, sporting equipment and travel/luxury goods also partially recovered over the course of the third quarter. Footwear trade, however, appeared to have stalled.

Trade in telecommunications equipment, which includes smart phones, improved year-on-year in the third quarter compared to the previous quarter, but fell by 11% in September year-on-year, which may suggest market saturation.

In contrast, trade in computers and electronic components, which had already recorded positive growth in the second quarter, accelerated in the third quarter by 11% and 10%, respectively.  

After growing at an average rate of 10% in the first half of the year, trade in pharmaceutical products contracted by 1% in the third quarter, indicating an end to stockpiling as COVID-19 cases dropped significantly over the summer.

Trade in personal protective equipment (PPE) rose by 63% in the third quarter compared to the year before, with trade in face masks, largely fabric masks, up 102%. In the first nine months of 2020, nearly 60% of face masks were supplied by China.

Total merchandise trade—which includes fuel and agricultural products as well as manufactured products—from January to September was down 11% year-on-year.

Trade in manufactured goods, for which prices are less volatile than commodities, contracted by 10% on average in the first nine months of 2020. The value of trade in fuels and mining products saw sharp declines in the third quarter due to falling prices, while trade in agricultural products remained resilient due to sustained demand for food during the pandemic.

Photo by CHUTTERSNAP on Unsplash

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