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World Trade Outlook Indicator

The WTO has launched a new World Trade Outlook Indicator (WTOI) designed to provide “real time” information on trends in global trade.

Combining a variety of trade-related indices, the WTOI is designed to give an early signal of the current direction of world trade and where it is likely to go in the near future.

In this way the WTOI should signal turning points in world merchandise trade volume. It complements existing tools such as the WTO’s longer-term trade forecasts, and other statistical releases.

The WTOI gives a headline figure to show performance against trend. A reading of 100 would indicate trade growth in line with recent trends, a reading greater than 100 would suggest above trend growth, while a reading below 100 indicates below trend growth. The WTOI will be updated on a quarterly basis.


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For further information on the World Trade Outlook Indicator please click here.

Background on the methodology

The WTO’s approach in calculating the WTOI is similar to that used in other composite leading indicators (CLIs) and purchasing managers’ indices (PMIs), except that it focuses on six key trade-related indices:
  • Export orders reported by central banks and national statistics agencies in leading manufacturing economies;
  • International freight tonne kilometres reported by the International Air Transport Association (IATA);
  • Total container throughput from a dozen major shipping ports, in twenty-foot equivalent (TEU) units;
  • Automotive vehicle sales and/or production figures in major markets;
  • Customs data on electronic components trade, in physical units; and
  • Customs data on trade flows for agricultural raw materials.
The WTOI uses a technique that separates high frequency fluctuations from the general tendency of a data series to produce a smoothed trend. All data in the WTOI are of monthly frequency and are seasonally adjusted and rebased to 100.

 

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Dee-Ann Prather, Down Under Enterprises International
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