World merchandise trade growth appears to have lost momentum in the fourth quarter of 2022 and is likely to remain weak in the first quarter of 2023. The headline barometer index fell to 92.2 from the last release of 96.2 and well below the benchmark value of 100, continuing to indicate weaker trade volume growth.
The Commodity Trade Barometer is a comprehensive leading indicator of world trade, providing real-time information on the trajectory of merchandise trade in relation to recent trends.
The latest World Trade Organization (WTO) barometer index (indicated by the blue line) is 92.2, below the benchmark value of 100 and well below the merchandise trade volume index (indicated by the black line), suggesting that the trade volume index for 2022Q4 and 2023Q1 may be below trend once statistics are available for this period.
The Commodity Trade Barometer Index states that world merchandise trade growth appears to have lost momentum in the fourth quarter of 2022 and is likely to remain weak in the first quarter of 2023. The headline barometer index fell to 92.2 from the last release of 96.2 and well below the benchmark value of 100, continuing to indicate weaker trade volume growth.
World merchandise trade volumes grew strongly in the third quarter of 2022, increasing by 5.6% compared to the same period last year. The cumulative year-on-year growth in the first three quarters of 2022 was 4.4%, higher than the 3.5% full-year growth forecast by the WTO in October last year. Preliminary trade volume statistics and other trade-related indicators indicate that the growth rate of trade volume in the fourth quarter of 2022 may turn negative, and the actual trade growth rate for the whole year is more in line with expectations. The expected trade slowdown is likely to be short-lived, as container throughput at Chinese ports has begun to pick up.
All components of the barometer were below trend except the Automotive Products Index (105.8), with sales and production data from the US, Europe and Japan above trend, offsetting declines in China. The export orders index (97.4) remains below trend but is rising, suggesting a possible near-term upturn. Meanwhile, the Container Shipping Index (89.3), Air Freight Index (87.8), Electronic Components Index (84.9) and Raw Materials Index (92.0) are all below the trend line and are falling, indicating widespread weakness in trade, affecting many sectors.
