The World Trade Organisation (WTO) recently announced it was lowering its trade forecast for 2023, scaling back projections due to a slump in manufacturing. World merchandise trade volumes are now predicted to grow by just 0.8 per cent this year, slashed from a 1.7 percent forecast announced in April.
This is a continuation of what we saw throughout the last quarter of 2022, when a slowing of trade and output became apparent. This was due to a host of contributing factors, such as rising interest rates, the knock-on effect of COVID-19, the cost of living crisis, and the war in Ukraine. The WTO says growth should slowly pick up into 2024, with stability gradually returning to the market.
Despite this, the sector remains positive overall. Over half of firms expect growth in 2024, linking it to mergers and acquisitions and the launches of new products.
A lack of output from the manufacturing sector is said to have triggered the change, with a downturn causing manufacturers to slash their recruitment and investment plans. The manufacturing sector has had a tough year, with the cost of living crisis, rising interest rates and a slow overseas market combining to add pressure. Many firms have slowed down operations to meet decreased domestic and overseas demand.
Poor market conditions, pressures from inflation and a weakened economy overall have led to these tough times for manufacturers, with staff levels falling and operations slowing. To address the slowdown, firms are turning to new solutions to increase efficiency and boost production. Some are choosing to invest in technology to speed up operations, such as electric and pneumatic Roscamat tapping machines. Roscamat tapping machines, alongside other key pieces of machinery, can help firms stay at the cutting edge of their field and get ahead of issues in the manufacturing landscape.
Although the outlook for the manufacturing sector is uncertain, the WTO expects growth to pick up again in 2024 and reach a steady 3.3 per cent. Firms can be hopeful that better trade conditions are on the horizon.