WTO: World trade continues to suffer

World trade is expected to remain “below trend” into the fourth quarter of 2019, according to the World Trade Organization’s (WTO) latest Goods Trade Barometer. That is not good news for an already ailing global airfreight industry.

The indicator’s reading of 96.6 marks a slight improvement compared to the 95.7 registered in August, but it remains well below the index’s baseline value of 100, signalling below average growth.

The Goods Trade Barometer provides near real-time information on the trajectory of world merchandise trade volumes relative to recent trends.

Some components of the barometer have stabilised since the last reading in August, the WTO noted, but others remain on a downward trajectory – reflecting heightened trade tensions and rising tariffs in key sectors.

Within the overall Goods Trade Barometer, the index for international air freight, at 93.0, has deteriorated well below trend.

Official data confirms the loss of momentum in goods trade foreseen by the Goods Trade Barometer earlier this year, the WTO observed.

According to the latest WTO quarterly trade volume statistics, merchandise trade rose by only 0.2% year-on-year in the second quarter of 2019, compared with 3.5% in the same quarter of last year.

In September, WTO economists downgraded their trade growth expectations for 2019 to 1.2%, down from the 2.6% forecast in April.

They attributed this substantial deceleration to slowing economic growth, increased tariffs, Brexit-related uncertainty, and the shifting monetary policy stance in developed economies.

The latest figures from other bodies all tend to support the view that there is little likelihood of a recovery in airfreight fortunes any time soon. For example, IATA’s latest figures, covering the month of September, show that market demand for air cargo services remains weak.

Industry-wide, volumes declined by 4.5% in September year on year. This recent slide, which followed a 3.9% decrease in volumes in August, marked the eleventh consecutive month of decline in airfreight volumes.

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