The barometer’s current reading of 103.9 is above both the baseline value of 100 for the index and the previous reading of 100.7 from last November, signalling a marked improvement in merchandise trade since it dropped sharply in the first half of last year. All component indices are either above trend or on trend, but some already show signs of deceleration while others could turn down in the near future. Furthermore, the indicator may not fully reflect resurgence of COVID-19 and the appearance of new variants of the disease, which will undoubtedly weigh on goods trade in the first quarter of 2021.
Indices for export orders (103.4) and automotive products (99.8), which are among the most reliable leading indicators for world trade, have both peaked recently and started to lose momentum. In contrast, the container shipping (107.3) and air freight (99.4) indices are both still rising, although higher-frequency data suggest that container shipping has dipped since the start of the year. Finally, while the indices for electronic components (105.1) and raw materials (106.9) are firmly above trend, this could reflect temporary stockpiling of inventories. Taken together, these trends suggests that trade’s upward momentum may be about to peak if it has not already done so.
To read the full article from the World Trade Organization, please click here