GLOBAL merchandise trade is continuing to recover in 2021 following a steep but brief pandemic-induced drop in the second quarter of last year, the World Trade Organisation said on Friday.

The WTO’s latest ‘Goods Trade Barometer’ index that provides real time information on the trajectory of merchandise trade relative to recent trends, surged to 109.7 points in May, well above the baseline value of 100, and up 21.6 points year-on-year.

"In the latest month, all of the barometer's component indices were above trend and rising, highlighting the broad-based nature of the recovery and signalling an accelerating pace of trade expansion," the global trade body said.

Among the barometer’s component indices, the biggest gains were seen in export orders (114.8), air freight (111.1) and electronic components (115.2), all of which are highly predictive of near-term trade developments.

The strength of the automotive products index (105.5) may reflect improving consumer sentiment, since confidence is closely linked to sales of durable goods. This is also true of agricultural raw materials (105.4), which are mostly made up of wood intended for housing construction.

Finally, the strong showing for container shipping (106.7) is more impressive in light of the fact that sea shipments held up well during the pandemic and had less ground to make up as a result.

The WTO said the latest barometer reading is broadly in line with its trade forecast of an 8 per cent pickup in the volume of world merchandise trade this year following a 5.3 per cent decline in 2020.

"The relatively positive short-term outlook for trade is marred by regional disparities, continued weakness in services trade and lagging vaccination timetables, particularly in poor countries," it said.

Quarterly trade volume statistics for the first and second quarters of 2021 are also expected to show very strong year-on-year growth, partly due to the recent strengthening of trade and partly as a result of the trade collapse last year.