Last reviewed 25 February 2021

According to the latest Goods Trade Barometer published by the World Trade Organisation (WTO), world merchandise trade volume growth remained strong in the fourth quarter (Q4) of 2020 after trade rebounded in Q3 from a deep Covid-19 induced slump.

The Barometer's current reading of 103.9 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 2020.

However, while all component indices are either above trend or on trend, some already show signs of deceleration while others could turn down in the near future, the WTO warns.

It points to indices for export orders (103.4) and automotive products (99.8), which are among the most reliable leading indicators for world trade and which have both peaked recently and started to lose momentum.

UNCTAD (United Nations Conference on Trade and Development) has also noted that the rebound in Q4 of 2020 was uneven, highlighting that it was largely powered by the trade of goods from and to developing countries and especially by the very strong performance of East Asian economies.

Led by trade in goods, global trade recovered in Q4, reducing its overall decline for the year to about 9%, according to UNCTAD’s new Global Trade Update.

The bad news for the UK is that, while imports and exports of goods grew by about 8%, trade in services (on which much of the UK economy depends) stagnated as measures taken in the global fight against Covid-19 continued to affect sectors such as travel.