In a significant downturn, the global exports of intermediate goods (IGs) fell by 8 per cent year-on-year in the second quarter (Q2) of 2023, totalling $2.3 trillion. This decline, a continuation of the previous year's trend, is attributed to stagnant commodity prices and a notable decrease in consumer demand fuelled by soaring inflation and interest rates. The slump has universally impacted all regions and most IG product categories, as per the World Trade Organization (WTO).

IGs, essential for producing final products, serve as a barometer for global supply chain activities. All regions reported declines in IG exports during this period, with Asia experiencing a 13 per cent drop. Africa followed closely with a 12 per cent decrease, while North America, South and Central America each saw an 8 per cent reduction. Europe registered the least decline at 2 per cent, WTO said in a press release.

On a quarter-on-quarter basis, South and Central America recorded a 14 per cent increase in exports, primarily to China, amounting to $15.3 billion. North America witnessed the most significant quarterly decrease in IG exports, dropping by 3 per cent to $297 billion, particularly affecting its trade with Asian and European industrial partners. European industrial input exports also dipped by 2 per cent in the same quarter.

Intra-regional IG trade mirrored the global trend, with notable declines across all regions. Asia, often referred to as ‘Factory Asia’, suffered a 16 per cent drop in intra-regional trade. North America's intra-regional trade experienced the least impact, with a mere 2 per cent decline. Africa, Europe, and South and Central America also reported decreases in their intra-regional trade.

Despite the general contraction, European exports to Asia and the Americas showed resilience, registering year-on-year increases of 5 per cent and 1-2 per cent, respectively.

Fibre2Fashion News Desk (KD)

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