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Growth in global trade in goods is likely to have lost momentum in the fourth quarter of 2022, and may remain weak in the first quarter of 2023. However, any slowdown may be short lived as container handling at Chinese ports and new export orders from Purchasing Managers’ Indices have started to pick up, according to the latest WTO Goods Trade Barometer issued on Wednesday.
“The volume of world merchandise trade was up 5.6 per cent in the third quarter of 2022, compared to the same quarter in the previous year. Meanwhile, cumulative year-on-year growth for the first three quarters of 2022 stood at 4.4 per cent, above the WTO’s forecast released last October of 3.5 per cent for the whole year. A downturn in the fourth quarter would bring actual trade growth more in line with the WTO’s forecast for 2022,” it said.
The Goods Trade Barometer is a composite indicator for world trade and provides real-time information on the trajectory of merchandise trade relative to recent trends. Barometer values greater than 100 signal above-trend trade volume, while values less than 100 suggest that goods trade has either fallen below trend or will do so in the near future.
“Preliminary trade volume statistics and other trade related indicators suggest that quarter-on-quarter trade volume growth will probably turn negative in Q4 of 2022…,” said the report.
On the positive side, the anticipated trade slowdown may not last long, since container throughput of Chinese ports and PMI have already started to pick up, it added.
“All of the barometer’s component indices have fallen below trend except for the automotive products index (105.8), which was buoyed by above-trend sales and production figures for the United States, Europe and Japan, outweighing declines in China,” said the report.
Although the export orders index (97.4) remained below trend, it was rising, hinting at a possible upturn in the near future, it said.
But indices for container shipping (89.3), air freight (87.8), electronic components (84.9) and raw materials (92.0) were all below trend and declining, suggesting that weakness in trade is broad-based, impacting many sectors.
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