Goods barometer little changed at start of 2025 but trade policy uncertainty looms

The Goods Trade Barometer is a composite leading indicator for world trade, providing real-time information on the trajectory of merchandise trade relative to recent trends. Barometer values greater than 100 are associated with above-trend trade volumes, while barometer values less than 100 suggest that goods trade has either fallen below trend or will do so in the near future.

The latest reading of 102.8 for the barometer index (represented by the blue line in the chart) is above both the quarterly trade volume index (represented by the black line) and the baseline value of 100. This would normally signify that merchandise trade was above trend, with accelerating growth. However, rising trade policy uncertainty could have temporarily boosted trade as businesses and consumers frontload imports ahead of potential measures, possibly reducing demand later in the year. As a result, the barometer index should be interpreted with caution.

In the third quarter of 2024 – the latest period for which WTO data is available – the volume of world merchandise trade continued to recover from the trade slump of 2023, growing 3.3 per cent year-on-year. Developments in the first three quarters last year were broadly in line with the WTO's most recent trade forecast of 10 October, which predicted trade volume growth of 2.7 per cent for the whole of 2024. Although the global average remained steady, there were some significant regional disparities in goods trade growth. In particular, European exports and imports were much weaker than anticipated, while Asian exports and North American imports exceeded expectations. The WTO's next Global Trade Outlook and Statistics report is scheduled for release in April 2025.

All of the barometer's component indices are currently on or above trend. Export orders (101.0), electronic components (102.3) and raw materials (101.6) are on trend, while indices for automotive products (105.5), container shipping (103.7) and air freight (102.7) are above trend to varying degrees. Export orders, which are usually the most predictive barometer component, remain close to the baseline value of 100. This indicator should be watched closely for any sign of an emerging trade slowdown.

The full Goods Trade Barometer is available here.

Further details on the methodology are contained in the technical note here.