Global merchandise trade will continue to expand in the fourth quarter in volume terms, new figures show, but the pace of growth is likely to be slower than earlier in the year when trade recorded strong increases.
The latest reading of 102.2 from the World Trade Organization’s (WTO) latest World Trade Outlook Indicator (WTOI) for the quarter is slightly lower than the previous reading of 102.6 issued in August this year, which pointed to a continuing recovery of trade in the second and third quarters.
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This was confirmed by actual trade developments, as trade growth remained strong in the second quarter and was stable in the third quarter. However, the most recent reading reflects a number of moderating factors.
The WTO says the export orders component of the Indicator remains above trend but has turned downward recently, suggesting trade growth will moderate but remain fairly strong in the coming months.
Additionally, indices for international air freight and container port throughput are above trend but have lost upward momentum, pointing to decelerating trade growth. Automobile production and sales are below trend but show signs of having bottomed out, which could indicate strengthening consumer confidence. Indices for electronic components and agricultural raw materials are both rising, although the level of agriculture raw materials trade remains below its medium-run trend.
The results are broadly consistent with the WTO’s upgraded forecast for world merchandise trade growth that it issued in September, which predicted 2017 trade expansion at 3.6% following stronger than expected trade growth in the first half of the year.
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