The World Trade Organisation (WTO) issued its latest World Trade Outlook Indicator (WTOI) on 9 August 2018. This suggests that trade growth will be easing in the coming months, with a WTOI reading of 100.3 which is below the previous value of 101.8 and only just above the baseline value of 100 for the index.

The lower figure results from weakening in component indices such as export orders and automobile production and sales with readings of 97.2 and 98.1 respectively. Export orders have steadily declined during 2018 and automobile production and sales. Air freight and container port throughput were still above the trend but momentum in their growth appears to have passed its peak. The results are still generally in line with the trade forecast issued on 12 April 2018 predicting a slowing in the volume of trade in merchandise from 4.7% in 2017 to 4.4% in 2018.

The weaker figures may be a response to the increased tensions in world trade, and the WTO is continuing to monitor the increasing trade tensions that pose risks to the forecast level of trade. . Other statistical measures of world trade have indicated that the effect of trade restrictive measures may be having an effect on the momentum of trade growth. Trade restrictive measures include not only new tariffs on imports or exports or increases in existing tariffs; but also cover import bans or quantitative restrictions. The definition of trade restrictive measures also includes indirect obstacles to trade such as more complex customs regulation or procedures or restrictive changes to local content requirements.

The WTOI is designed to reveal information on world trade in relation to the recent trends and is therefore a useful instrument for identifying turning points and momentum in world trade growth. The baseline reading of 100 indicates growth in line with medium term trends while results above 100 indicate growth above trend. The direction of change in the readings therefore indicates the momentum of trade compared to the previous month. The WTOI should be read alongside the other trade statistics and forecasts to give a picture of the overall situation of world trade.