World Trade Recovery strengthens in Q1-21

The availability of ExportPlanning pre-estimates of Q1-2021, accessible through the World Trade datamart, allows to document the economic situation of world trade, in order to map the status of the recovery, which, is characterized by a strongly asymmetric profile in terms of sectors and geography.

In the first quarter of 2021 world trade consolidates at pre-crisis levels

After closing the year more positively than initially assumed, see the article World trade closes 2020 with a single-digit decline, world trade opens 2021 with y-o-y growth at constant prices of 6%. The result certifies a further reinforcement of the recovery path of international trade, which had led to a progressively recover of pre-pandemic values since the Q4-2020 (see chart below).

If compared with the Q1-2019 values, global trade flows mark a growth in quantity close to 3%. However, it must be highlighted that the 2019 results were already affected by a phase of weakness, mainly linked to the increase in protectionist actions on the US-China front.
World trade in goods was therefore characterized by a rapid and significant recovery to pre-crisis levels, evidence of the relative resilience of the manufacturing industry to the current economic situation, while is still open the challenge of a full recovery of the development path that marked global trade in the two years prior to 2019.

As the remodeling that the epidemic has imposed on the international consumption industry, it particularly informative to map the recovery in sectoral terms in order to monitor last changes.
The graph below allows us to analyze the economic picture of the main industries, reporting the change experienced in the last year (X axis) and change recorded in the first quarter of 2021 compared to the first quarter of 2019 (Y axis). In this way, it is possible to distinguish sectors that have more quickly recovered pre-crisis values from those that are still experiencing some difficulties.

World trade by industry: values at constant prices
(base year=2012)

Source: ExportPlanning

For consumer goods, along with the positive results of first necessity goods (Health System and Agri-food), we report the continuation of some consumption trends that have already emerged:

• The weakness of the Textile-Fashion supply chain continues (E2, B2): when comparing with the Q1-2019 figure, the most significant losses are concentrated in the Personal Goods segment, but with a relatively differentiated performance (see the article Wolrd Trade of Fashion Products: signs of Recovery in the First Quarter);
• Growth in global demand for Home System (E3) strengthens, marking a vigorous 8% increase in quantity over Q1-2019 values. The result is also accompanied by the significant growth recorded by Intermediate Construction Goods (C1), up 10%.

Particularly interesting is the picture for the investment goods: together with the positive results that continue to characterize the ICT tools and components industry (F1) and supply chain (D1), the other industries also mark a significant recovery.
With the exception of Industrial Equipment (F5), for which the recovery seems relatively slow, both Machinery (F4) and Equipment for Industry (F2) mark growth compared to pre-pandemic levels.
The result discounts the effects of an already slowing 2019 for the segment, but it also signals a pickup in investment in industrial machinery and equipment aimed at modernization and technological improvement.
For the cluster, we note, finally, the strong rebound of Transportation Equipment (F3), whose recovery follows, however, the large decline suffered in 2020 and a previous two years of weakness.