Services Trade Slump Persists as Travel
Wanes; Other Service Sectors Post Diverse Gains, WTO Reports
Global services trade remained sluggish in the first quarter
of 2021, falling 9% year-on-year after posting a 21% decline for the full year
of 2020 driven by continued weakness in travel services. New COVID-19 variants
have further delayed the recovery of international travel; however, other
services sectors, such as transport, are starting to bounce back, with
variations across regions due to the uneven distribution of vaccines and
differing rollback of pandemic restrictions.
Services Trade
Average of exports and imports.
Source: WTO-UNCTAD-ITC estimates.
The
latest figures for services contrast with the recovery in global goods trade,
which grew 12% year-on-year in the first quarter of 2021 following a 9% drop in
2020.
Travel
remains the most affected services sector, down 62% year-on-year both in 2020
and in the first quarter of 2021. Sharper declines were recorded in the first
three months of 2021 in Asia (-67%). International travellers'
expenditure was down 71% in Latin America and the Caribbean where, prior to the
pandemic, travel receipts made up 43% of total services exports. Despite
rollouts of vaccines in many advanced economies, the emergence of new virus
variants and the reintroduction of travel restrictions and lockdowns are
countering hopes of a summer recovery of international tourism.
Transport, Travel and Other Services trade
Average of exports and imports.
Source: WTO-UNCTAD-ITC estimates.
By
contrast, transport rebounded quickly. World transport exports were still down
14% year-on-year in the fourth quarter of 2020 but bounced back to its 2020
value in the first quarter of 2021. Recovery was boosted by a high demand for
goods coupled with surging freight rates due to port congestions, shipping
delays and a global shortage of containers. In the first quarter of 2021,
Asia's transport exports rose 28% year-on-year. Ocean shipping rates, which
started to rise in the summer of 2020, are expected to remain high at least for
the rest of 2021. Freight transport, the largest component of international
transport, has helped to partly offset the sharp drop in passenger transport
due to the pandemic.
“Other
services” — such as construction, recreational, legal and financial services —
increased on average by 6% year-on-year in the first quarter of the year. While
construction lagged, with global exports down 2%, most other sub-sectors saw a
return to growth, particularly audio-visual, artistic and recreational
services, which was among the sectors most affected by COVID-19 related
restrictions. Computer services continued its impressive growth, up 19%
year-on-year.
Other services exports by main sub-sector
Source: WTO estimates based on
WTO-UNCTAD-ITC data.
Latest
figures further show that the cumulative values of services exports of most
economies in the period of January-May 2021 remained well below their 2019
levels, with sharp contractions recorded particularly in Australia (-36%) and
Uganda (-29%). In the United States and in the Russian Federation, services
exports were down 19% and 17% respectively compared to values from two years
ago. By contrast, China's services exports were up 23% boosted by transport
exports, computer and business services. European countries showed an uneven
performance. Luxembourg's services exports were up 13%, sustained by financial
services, while large tourism exporters in the region continued to struggle.
Cumulative services exports of selected economies
Source: National data and Eurostat.