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Law360 (May 20, 2020, 6:07 PM EDT) -- Global merchandise trade hit a record low by the World Trade Organization's measure, with the trade body forecasting Wednesday that growth will continue to slip as the pandemic lives on.
The plummet in merchandise trade tracks with the WTO's April estimate that the global exchange of goods will contract between 13% and 32% in 2020, depending on the duration of the virus outbreak and government responses, according to the WTO's Goods Trade Barometer.
"The current reading captures the initial phases of the COVID-19 outbreak, and shows no sign of the trade decline bottoming out yet," the WTO said.
The barometer uses real-time data to plot the growth of global merchandise trade on a scale from 90 to 110, with 100 signifying normal growth. The May reading of 87.6 is not only well below the baseline, but is the lowest value on record since the index took off in July 2016, according to the WTO.
"All of the barometer's component indices are currently well below trend," the WTO explained.
Automotive goods fared the worst in the past few months, with the barometer ringing in a 79.7 reading that the WTO attributed to collapsing car production in major economies. Electronic components and agricultural raw materials trade were the only ones to appear stable, but the barometer still recorded below-trend growth, according to the WTO.
The barometer's forward-looking export orders index sharply declined, which indicates declining trade will continue in the near future, the organization warned.
The barometer last recorded global merchandise trade at 95.5 in February.
Global merchandise trade's grim outlook follows up on the WTO's reports that global services trade has been slipping since the end of 2019, when the coronavirus first broke out in China.
Based on data through the end of January, which only partially reflects coronavirus' effects, the WTO's Services Trade Barometer — which complements the merchandise trade one — found that passenger air travel and shipping faced the worst declines among its services indices.
The services barometer recorded below-average ratings on the global purchasing managers' index, the most forward-looking data set within the barometer, indicating that global services trade would continue to take a beating from the pandemic.
--Additional reporting by Alex Lawson. Editing by Adam LoBelia.
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