Purchases of durable goods are more dependent on credit, making them more vulnerable to interest rate fluctuations.

Durable goods have a longer useful life, with a greater ability to withstand wear and tear, such as cars, furniture, washing machines, refrigerators, computers and televisions.

According to a World Trade Organization (WTO) report, in response to declining consumption of manufactured goods, companies may also postpone spending on fixed investment in capital goods.

Various studies indicate that investment is the most import-intensive component of domestic demand (with an overall import content of around 36% on average), followed by exports and private consumption.

Durable goods

It has long been observed that differences in the composition of merchandise trade and GDP tend to produce stronger fluctuations in this composition than in GDP, making trade growth very «procyclical».

In other words, merchandise trade growth slows more than GDP growth in periods of economic contraction and may even become negative, as it did in 2023.

Conversely, trade recovers more robustly than production during expansion phases, as it did in 2010 and 2021.

Exports and imports

According to the WTO, the highly procyclical nature of trade can be attributed to the high share of manufactured goods in merchandise trade (63% in 2022) compared to GDP (28% in 2022), which is mostly based on services.

Consumption of manufactures, particularly durables and capital goods, is sensitive to real disposable income and cyclical factors.

When real income declines, consumers prefer to postpone the purchase of durable goods, such as vehicles and household appliances, which often have a high import content, rather than delay the consumption of services, where the consumer has less choice (e.g. rents, medical services, etc.).