The World Trade Organization (WTO) Barometer on Trade in Goods broke a record in its latest reading published on Wednesday.
Consequently, merchandise trade continues to recover strongly from the crisis caused by the Covid-19 pandemic.
The Merchandise Trade Barometer is a composite leading indicator that provides real-time information on the trajectory of merchandise trade in relation to recent trends, ahead of conventional trade volume statistics.
The latest barometer reading of 110.4 is the highest on record since the indicator was first published in July 2016, increasing by more than 20 points year-over-year.
Although still well above trend, the index has started to rise at a declining pace, which could herald a spike of bullish momentum in trading.
Barometer on Trade in Goods
All component indices of the barometer were above trend in the past month, illustrating the broad nature of the recovery.
Namely: the indices for air cargo (114.0), container shipping (110.8) and raw materials (104.7) in particular continued to rise, indicating faster-than-average trade growth.
For its part, the auto products index (106.6) rose despite the fact that automobile production and sales fell in July in some countries due to a shortage of semiconductors (the increase can be explained by the softening of the underlying data).
This shortage is also reflected in a small drop in the electronic components index (112.4).
The prospective new export orders index (109.3) has slowed more definitively, providing a further indication that the pace of recovery is likely to slow down in the near term.
At the same time, the increase in the air cargo index reflects a rebound in air transport due to the relaxation of travel restrictions related to the pandemic in some (mainly developed) countries.
The index could suddenly drop again if the spread of Covid-19 variants forces a re-imposition of restrictions.
The latest barometer reading is broadly consistent with the WTO’s most recent trade forecast of March 31, which forecast an 8% increase in the volume of world merchandise trade in 2021 after a 5.3% drop in 2020.
