IGs refer to inputs used to produce a final product and are an indicator of the activity in global supply chains. All regions posted year-on-year declines in IG exports in the second quarter of 2023. Asia recorded a decline of 13%, followed by Africa (-12%), North America (-8%), South and Central America (-8%), and Europe (-2%).
In terms of quarter-on-quarter performance, exports of South and Central America increased the most compared to the first quarter of 2023, up 14%. This was largely due to Brazil’s seasonal exports of soybeans mostly destined for China worth US$ 15.3 billion. Brazil also supplied Argentina with US$ 1.3 billion worth of soybeans in the second quarter compared to zero a year earlier as Argentina experienced a drought. The sharpest quarterly decline of IG exports among regions, meanwhile, was from North America (-3% to US $ 297 billion) notably vis-à-vis its Asian and European industrial partners. European exports of industrial inputs also decreased by 2% in the second quarter.
All categories of IG exports declined year-on-year in the second quarter, except for transport parts and accessories which grew 13%. Notably, China’s exports of lithium-Ion batteries (up 40% year-on-year) were boosted by accelerating worldwide production of electrical vehicles. Exports of all other IG categories declined: other industrial supplies (-14%), food and beverages (-9%), parts and accessories excluding transport equipment (-8%), and ores and precious stones (-1%).
Similar to global IG flows, IG trade within regions posted a decline in the second quarter. As in previous quarters, intra-Asia trade – often characterized as “Factory Asia” — was among the most impacted by the reduction in global demand, falling 16% year-on-year. IG trade within North America was the least affected, with just a 2% decline. Intra-regional trade also declined for Africa (-37%), Europe (-4%), and South and Central America (-4%).
Most inter-regional exchanges likewise contracted in the second quarter. Nevertheless, European exports to Asia and the Americas grew, with year-on-year increases of 5% and 1-2% respectively. European shipments to Asia were backed by a rise in gold exports.
The second quarter information note on trade in intermediate goods is available here.
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