Global trade in goods saw poorer than expected performance in the final quarter of 2022 and is likely to remain weak for the first three months of this year, the World Trade Organization (WTO) has warned.
The body's latest Goods Trade Barometer, which is a key indicator of sentiment for the industry, reported a figure of 92.2 at the end of December 2022. A recording of 100 indicates static trade volumes based on current trends, with numbers over 100 expressing positive sentiment and figures below this mark a decline.
December's reading marked the first time the barometer has dipped into negative territory since mid-2020, at the height of COVID-19 shutdowns around the world. In the previous quarter, between July and September 2023, the index recorded a figure of 106.6, which was mainly due to resilient exports in Europe and the Americas.
All goods categories tracked by the study recorded sub-100 figures with the exception of automotive products, which stood at 105.8. The worst-performing segment of global goods trade was electronic components, at 84.9, with indices for container shipping (89.3) and air freight (87.8) also weighing down the overall figure.
The WTO noted this indicates that the weakness in global trade is broad-based and impacting many sectors. However, while the report also suggested that this weakness will continue into Q1 2023, early signs are that this downturn may only be temporary.
"Any slowdown may prove to be short-lived since container throughput of Chinese ports and new export orders from Purchasing Managers' Indices (PMIs) have already started to pick up," the organization stated.
Up until the third quarter of 2023, cumulative year-on-year trade growth stood at 4.4 percent, significantly above the WTO's initial forecast of 3.5 percent for the year. As a whole. Downturn in the fourth quarter would therefore bring actual trade growth more in line with the WTO's previous forecast for 2022.