The Goods Trade Barometer, a composite leading indicator for global trade, has risen above trend, indicating an upturn in merchandise trade volume. The barometer's latest reading of 103.0 suggests that trade volume growth will remain positive in the second and third quarters of 2024 once official statistics are released.
After remaining flat since late 2022, world merchandise trade volumes began to increase in the fourth quarter of 2023 and gained momentum in early 2024. In the first quarter of 2024, trade was up by 1.0% quarter-on-quarter and 1.4% year-on-year. The average quarterly growth over the last two quarters was 0.7%, equating to an annualized rate of 2.7%, closely aligning with the World Trade Organization's (WTO) April forecast of a 2.6% increase for the year.
Recent data indicate weaker than expected trade growth in Europe but stronger performance in other regions, suggesting potential adjustments to WTO's regional projections in its next update scheduled for mid-October.
Most component indices of the barometer are on or above trend, except for electronic components (95.4), which is below trend and declining. Indices for automotive products (103.3), container shipping (104.3), and air freight (107.1) are all above trend; however, the automotive index has shown signs of losing momentum recently. New export orders (101.2), typically a predictive component, is marginally positive but trending downwards, raising concerns about future trends. The raw materials index (99.3) is near trend but has seen a sharp decline over the past three months.
The full Goods Trade Barometer report is available online along with detailed methodology notes.