Global goods trade has stalled and is set to remain weak into the fourth quarter of this year as tariffs and trade tensions continue to bite, according to new data out from the World Trade Organization (WTO).

The latest goods trade barometer, published on a quarterly basis by the intergovernmental organisation, signals changes in world trade growth two to three months ahead of merchandise trade volume statistics. At 96.6, the index’s current reading is below the baseline value of 100, signalling below-average growth, and confirming the view of WTO economists, who in October sharply downgraded their trade growth expectations for 2019 to 1.2%, down from the 2.6% forecast in April. They attributed this substantial deceleration to slowing economic growth, increased tariffs, Brexit-related uncertainty, and the shifting monetary policy stance in developed economies.

“The darkening outlook for trade is discouraging but not unexpected. Beyond their direct effects, trade conflicts heighten uncertainty, which is leading some businesses to delay the productivity-enhancing investments that are essential to raising living standards,” says WTO director general Roberto Azevêdo. “Job creation may also be hampered as firms employ fewer workers to produce goods and services for export.”

Digging into the figures, it’s not all doom and gloom, however. The indicator’s reading of 96.6 marks a slight improvement compared to the 95.7 registered in August. Meanwhile, with a reading of 99.8, versus 93.5 in August, automotive products have firmed up to close to on-trend territory, while container shipping’s reading has risen to 100.8, versus 99.0 last quarter.

This might go some way towards explaining recent findings by HSBC that, far from being cowed by the current tough environment for global trade, nearly half of companies across the world are more optimistic about their growth compared to a year ago.

Nonetheless, the indices for international air freight, electronic components, and raw materials, at 93.0, 88.2 and 91.4 respectively have all deteriorated further below trend versus August. Electronic components trade was weakest of all, possibly reflecting recent tariff hikes affecting the sector.

According to the latest WTO quarterly trade volume statistics, merchandise trade rose by only 0.2% year-on-year in the second quarter of 2019, compared with 3.5% in the same quarter of last year. With this latest barometer read-out, it looks almost certain that goods trade will stay stubbornly below its medium-run trend into the fourth quarter, pouring water on any remaining slivers of hope of a short-term revival.