Global merchandise trade will maintain steady growth in the first quarter in volume terms, new figures show, with strong results expected for air freight, container shipping and export orders.
The latest reading of 102.3 from the World Trade Organization’s (WTO) latest World Trade Outlook Indicator (WTOI) for the quarter is slightly higher than the previous reading of 102.2 issued in November last year, indicating continued solid trade volume growth following robust expansion in 2017.
According to the component indices of the WTOI, while merchandise trade volume at 102.7, container port throughput at 104.3, and air freight at 103.2 are firmly above trend, export orders at 102.8 have reached their highest level since 2011, indicating sustained recovery.
In contrast, three other components – automotive products at 101.0, agricultural raw materials at 100.8 and electronic components at 94.1 – suggest “a weakening of consumer sentiment”. These results, the WTO says, are somewhat stronger than its most recent trade forecast issued in September, which predicted merchandise trade volume growth of 3.6% for 2017 and 3.2% in 2018.
The WTO maintains that its Indicator is designed to provide “real time” information on the trajectory of world trade relative to recent trends, and not as a short-term forecast, although it does provide an indication of trade growth in the near future.
Its main contribution is to identify turning points and gauge momentum in global trade growth. Readings of 100 indicate growth in-line with medium-term trends; readings greater than 100 suggest above trend growth; while those below 100 indicate the reverse. The direction of change reflects momentum compared with the previous month. The WTOI has recorded readings of 102 or higher since February 2017, which coincided with a strengthening of global trade flows.
The WTO will issue the next trade forecast in April.