WTO forecasts ‘moderate’ trade growth at year’s end

While trade volumes are expected to continue increasing through the rest of the year, the World Trade Organization (WTO) forecasts that the pace of this growth will be slower than at the start of 2017.

   While trade volumes are expected to continue increasing through the rest of the year, the World Trade Organization (WTO) forecasts that the pace of this growth will be slower than at the start of 2017.
   Specifically, the WTO Indicator (WTOI) for the fourth quarter of 2017 has registered at 102.2 signals, down from the trade body’s last reading of 102.6 signals in August.
   WTOI’s measurement of export orders suggests moderately strong growth in the coming months. However, indices for international air freight and container throughput at the world’s ports suggest some lost momentum, and automobile production and sales numbers appear to be bottoming out. Indices covering trade in electronic components and agricultural commodities are both rising. 
   The WTO said these results are “broadly consistent” with its upgraded forecast for world merchandise trade growth that was issued on Sept. 21. This forecast predicted 2017 trade expansion of 3.6 percent, following a stronger than expected start to trade activity the first half of this year.  
   Readings of 100 within the WTOI indicate growth that’s in line with medium-term trends, while readings greater than 100 suggest above trend growth. Those readings below 100 indicate the reverse.
   The WTOI is a compilation of a variety of trade statistics sources. Data on container shipping, for example, is sourced from port authorities, national statistical agencies and industry groups. The trade body obtains export order data from HIS-Markit indices, while data on automobile sales and production comes from central banks, national statistical agencies and industry groups. The IHS Global Trade Atlas database provides the WTO with customs data on electronic components and agricultural commodities. 
   The International Air Transport Association provides the WTO with data on global air cargo volumes. “Air freight has proven to be a very timely indicator of overall world trade and an early signal of turning points in economic activity,” the WTO said.