13 July 2023
PMI surveys by S&P Global Market Intelligence paint a grim picture of global trade at the end of the second quarter, with exports experiencing their sixteenth consecutive monthly decline. The slump in export orders for goods and services intensified, reaching its fastest rate of decline in five months. While service sector exports managed to show some growth for a fourth consecutive month, the rate of expansion cooled from the previous month’s record high. On the other hand, the downturn in goods trade expanded across sectors, affecting intermediate goods, investment goods, and consumer goods. The decline in machinery exports signals reduced investment spending, while reduced exports of consumer goods point to weakened household demand. Although travel and tourism exports saw a spring surge, boosting service sector exports, there are signs of this momentum fading, likely due to interest rate hikes and increased global living costs. While professional and commercial services and financial services continue to perform well, the divergence between global manufacturing and global services is not expected to persist indefinitely.