- Global commercial services trade grew 25% year-on-year in the third quarter of 2021, driven mainly by transport and digitally deliverable services
- But the rise in global services trade does not yet represent a full recovery from pre-pandemic levels
- Transport services trade grew 45% year-on-year in the third quarter of 2021, helped by surging shipping rates
- Asia’s transport exports rose by 71% compared to Q3 2020 and 46% compared to Q3 2019
Transport services trade grew 45% year-on-year in the third quarter of 2021, helped by surging shipping rates, according to the latest data from the World Trade Organization (WTO).
Transport, together with digitally deliverable services such as computer, financial and business services, elevated global commercial services trade to a 25% year-on-year increase in the third quarter of 2021, WTO said in a February report.
But the rise in global services trade is yet to represent a full recovery from pre-pandemic levels, as services trade remains 5% below levels recorded in the third quarter of 2019, the report continued. Unequal distribution of vaccines, the emergence of new variants, and border restrictions continue to weigh on international travel.
The third quarter services trade growth has kept pace with growth in trade in goods (24%) in the same period.
World transport services, in particular, rose 45% year-on-year in the third quarter of 2021, and by 12% compared with the same period of 2019. Recovery was boosted by soaring consumers’ demand for goods due to lockdowns and a strong increase in shipping rates. Also helping the rebound were the shift from services requiring physical proximity and fiscal stimulus measures in advanced economies.
The surge in transport demand coupled with pandemic-related restrictions resulted in port bottlenecks, misallocation of containers worldwide, and delays, which led to a strong increase in shipping rates.
In the third quarter of 2021, Asia’s transport exports rose by 71% year-on-year, and by 46% compared with the third quarter of 2019.
By contrast, the recovery of air passenger transport continued to lag, due to restrictions, remaining well below pre-crisis levels. Global international travellers’ expenditure in the third quarter of 2021 grew 54% year-on-year from a very low base in 2020. However, it remained 52% below the value in the third quarter of 2019, before the pandemic.
“Other services,” such as construction, recreational, legal and financial services, increased on average by 15% year-on-year in the third quarter of 2021. As a group, these services were less affected by the pandemic, with exports contracting by only 1% in 2020 on an annual basis.
Computer services continued its impressive rise in January-September 2021, with cumulative exports up 34% compared with the same period of 2019. Rapid growth was recorded both in developed and developing economies: computer services exports increased 29% in the United States, 42% in Mauritius, 51% in Ireland, 63% in Ukraine, and 68% in Bangladesh.
Internet traffic peaked during the pandemic due to remote working, learning, entertaining as well as e-commerce. International Internet bandwidth expanded by an estimated 30% in the world in 2021, according to the International Telecommunication Union.
Nevertheless, the value of telecommunications services fell by 4% in the first nine months of 2021 compared with 2019, reflecting steady declines in global prices, especially for bundled communication services.
By contrast, construction remains one of the sectors most affected by the pandemic. In 2020, world exports contracted by 18%. In the period January-September 2021, global construction exports were still down 12% compared with the same period of 2019.
According to the latest figures, the cumulative value of services exports in the period January-November 2021 remained below 2019 levels in many economies, with the sharpest decline recorded in Australia (-35%). In Africa, Morocco’s and Uganda’s services exports were 20% lower than in 2019.
By contrast, services exports from China increased by 37% and from the Republic of Korea by 12% supported by transport services. Other Asian economies such as Pakistan and India exported more than before the pandemic owing to computer services.
Photo by Kurt Cotoaga on Unsplash
