The goods barometer continues to point to a weak upturn in trade, according to the World Trade Organization.

According to the latest WTO Trade in Goods Barometer released on March 8, global trade in goods may start to show modest gains in the first quarter of 2024, following a weak performance in 2023. However, geopolitical tensions continue to pose a downside risk to the near-term outlook.

The current value of the barometer index, 100.6, is above the quarterly trade volume index but only slightly above the baseline value of 100 for both indices. This suggests that trade in goods will recover gradually in the early months of 2024, but regional conflicts and geopolitical tensions could quickly derail any gains.

The Trade in Goods Barometer is a composite leading indicator for world trade and provides contemporary information on the trajectory of trade in goods according to recent trends. In this context, barometer values of more than 100 are associated with above-trend trade volumes. In contrast, barometer values of less than 100 indicate that trade in goods has fallen below trend or will fall shortly.

The volume of world trade in goods decreased by 0.4 percent quarter-on-quarter in the third quarter of 2023 and by 2.5 percent quarter-on-quarter in the same period of 2022. The sharp year-on-year decline in the third quarter is primarily attributed to the strong growth in the first three quarters of 2022. Trade in goods was flat mainly from January to October 2023, with the volume in the third quarter virtually unchanged since the start of the year and increasing by only 3.2 percent over two years. These developments are more damaging than the WTO's latest forecast of October 5, 2023, which envisages a 0.8 percent growth in trade in goods in 2023.

The component indices of the barometer are mostly neutral, with export orders (101.7) and air transport (102.3) rising slightly above trend, while container transport (98.6) and raw materials trade (99.1) remain slightly below trend. The index for production and sales of automobiles (106.3) remains well above trend, although it has recently lost momentum. Meanwhile, the sharp rebound in trade in electronic components seen in the previous barometer has been revised up (95.6). Trade in goods is expected to rebound in 2024 after below-average growth in 2023, but uncertainty remains high due to the prevalence of downside risks. 

The full Trade in Goods Barometer is available here.