The World Trade Organization’s latest World Trade Outlook Indicator (WTOI), released Feb. 12, suggests that the trade recovery of 2017 should continue, with solid trading volume growth in the first quarter of 2018.
The current WTOI value of 102.3 changed little from the 102.2 recorded in November 2017, indicating steady merchandise trade volume growth.
“Strong results for air freight, container shipping and export orders in particular suggest that, while the trade recovery may moderate in due course, it will likely continue in the coming months and remain above trend,” WTO noted.
Component indices of the WTOI were mostly favorable. Container port throughput (104.3) and air freight (103.2) were firmly above trend, indicating strong current shipments of goods. Meanwhile, export orders (102.8) reached their highest level since 2011, pointing to sustained recovery, WTO said. Weaker results were observed for automotive products (101.0), agricultural raw materials (100.8) and electronic components (94.1), which WTO said could indicate a weakening of consumer sentiment.
Overall, the results were somewhat stronger than WTO's most recent trade forecast issued on Sept. 21, 2017, calling for merchandise trade volume growth of 3.6% in 2017 and 3.2% in 2018. The next WTO trade forecast update is anticipated in early April.
The WTOI is designed to provide real-time information on the trajectory of world trade relative to recent trends and is not intended 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.
WTO explained that 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 have coincided with a strengthening of global trade flows.