Home / Knowledge / News / Results/Reports / WTO signals strong trade rebound but momentum may be short lived

WTO signals strong trade rebound but momentum may be short lived

23
Feb '21
Pic: Shutterstock
Pic: Shutterstock
World merchandise trade volume growth remained strong in 2020 fourth quarter after trade rebounded in the third from a deep COVID-19 induced slump, according to the World Trade Organisation (WTO). However, the pace of expansion in the fourth quarter is unlikely to be sustained in the first half of 2021 as key leading indicators appear to have already peaked.

The WTO’s Goods Trade Barometer released on February 18 has a current reading of 103.9, which 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, WTO said in a press release.

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.

In the third quarter of 2020, the seasonally-adjusted volume of world merchandise trade bounced back from a deep second quarter slump, boosted by rising exports in Asia and increasing imports in North America and Europe.

Goods trade in the third quarter, nevertheless, was still down 5.6 per cent compared to the same period in 2019 after having falling 15.6 per cent in the second quarter. These declines, while still very large, are less severe than many analysts feared at the start of the pandemic.

The WTO's most recent trade forecast of October 6, 2020, predicted a 9.2 per cent drop in the volume of world merchandise trade in 2020, but the actual decline may be slightly less severe.

Prospects for 2021 and beyond, moreover, are increasingly uncertain due to the rising incidence of COVID-19 worldwide and the emergence of new variants of the disease. Recovery will depend to a large extent on the effectiveness of vaccination efforts.

The WTO expects to release its next trade forecast in mid-April.

Fibre2Fashion News Desk (DS)


Must ReadView All

Pic: Shutterstock

Apparel/Garments | On 26th Feb 2021

Indonesia imposes ADD on RMG products

Indonesia recently imposed anti-dumping duty (ADD) equivalent to a...

Pic: Shutterstock

Textiles | On 26th Feb 2021

ITC supports boosting Tajik textile-clothing sector's

As part of the International Trade Centre's (ITC) intensive training...

Pic: GOTS

Textiles | On 26th Feb 2021

GOTS certifications grow by 34 per cent in 2020

In 2020, the number of GOTS certified facilities have reported a...

Interviews View All

Textile Industry, Head honchos

Textile Industry
Head honchos

Opportunity now to reimagine processes & systems in a digital environment

Jim Desai, Blaiva Fabricaa

Jim Desai
Blaiva Fabricaa

Fashion industry likely to remain labour-intensive in coming years

Top executives, Textile industry

Top executives
Textile industry

Technical textiles industry moving back to Europe

Herbert Guebeli,

Herbert Guebeli

Switzerland-based Sedo Engineering develops technologies for the denim...

Alessandro Marengo,

Alessandro Marengo

Founded in 1974, Italian firm Zaitex SpA is one of the leading suppliers...

Priyanka Gandhi,

Priyanka Gandhi

Established in 2016, Surat-based Shree Ganesh Yarns is a manufacturer of...

Thomas Ong P S, NanoTextile

Thomas Ong P S
NanoTextile

Malaysian company NanoTextile Sdn Bhd taps into the potentials of...

Daniel Odermatt, Ventile

Daniel Odermatt
Ventile

Ventile is a registered trademark used to brand a special high-quality...

Giulio Cesareo, Directa Plus

Giulio Cesareo
Directa Plus

UK-based Directa Plus is one of the largest producers and suppliers...

Tony Ward, Tony Ward

Tony Ward
Tony Ward

"You have to truly understand what your client wants, know her needs, what ...

Sweta Tantia, Tahweave & Garo

Sweta Tantia
Tahweave & Garo

Designer Sweta Tantia owns Garo, a couture indutva or ethnicwear brand,...

Robert Brunner, Devereux

Robert Brunner
Devereux

Golfwear and menswear brand Devereux is set for greener pastures. Robert...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

Leave your Comments


February 2021

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.


Advanced Search