Global trade volumes have suffered their greatest drop since the 2008 financial crisis according to new data provided to the European Commission, with the Covid-19 pandemic causing a slowdown in all regions of the globe.

According to the CBP World Trade Monitor, a monthly record of worldwide goods trade, overall volumes were 2.6% lower in February 2020 – the most recent month for which data is available – than they were in February 2019, marking the steepest decline in over a decade.

Month-by-month, the monitor shows the volume of worldwide goods trade fell by 1.4% in January compared to December, and a further 1.5% in February, a worse decline than CBP had predicted.

The steepest drop is recorded in Japan, where trade volumes were 6% lower in February 2020 than for the same month last year. The figure across emerging Asia – which includes China, where the Covid-19 outbreak started in late 2019 – is 2.2%.

The euro area and Latin America each experienced a decline of 3% or more, while the year-on-year decline in the US is clocked at 1.9%.

Worldwide production volumes also fell by 3.9% year-on-year. That will come as little surprise to manufacturers in the automotive, textiles and electronic sectors, already grappling with disruptions to their supply chains.

The trend is expected to get worse before it gets better, experts believe. Adam Slater, lead economist at Oxford Economics, suggests figures for subsequent months “are likely to show double-digit annual declines”.

However, the scale of any decline remains far from certain. Rebecca Harding, an independent economist and CEO of Coriolis Technologies, pointed out during a GTR webinar this week that while predictions vary considerably between different institutions, all are expecting a significant slump.

“The IMF are usually fairly optimistic and they’re saying the whole global economy is going to shrink by nearly 1% this year, from a growth prediction of around 3.4%,” she said.

“The WTO doesn’t err on the side of precision, but is predicting a drop in world trade of anything between 13% and 32%. That’s absolutely colossal.”

Clare Hunter, head of marketing and communications at Coltraco – a UK-based ultrasound technology manufacturer – said during the same event that the company has experienced a drop in global demand of between 20% and 30%.

“Our strategy is now turning towards our secondary markets,” she said. “We have six key markets and about 20 other secondary markets, where we are now driving forward to try and find global distribution partners to help us cover that complex matrix of countries and sectors.”

Hunter says one saving grace for Coltraco has been that its manufacturing takes place in the UK.

“That has enabled us to shore up our supply chain across this disruption that we’re seeing specifically in Asia and China, and we wonder whether it’s a time for other manufacturers and other companies in the UK to bring their manufacturing home,” she said.

For Harding, that trend was already visible before the pandemic.

“Trade is never going to be the same again,” she said. “We’re already seeing the localisation of supply chains. That’s been a trend that’s been happening for a few years and we will see that accelerate.”

Harding went on to warn against pursuing a protectionist trade agenda. For example, the provision of medical supplies linked to Covid-19 – notably ventilators, respirators, aprons and other protective equipment – has seen a sharp contraction in trade that is making it more difficult for net importers to combat the virus.

“The [medical supplies] market is dominated by the US, Germany and China, but trade growth at the moment is actually negative in those sectors, so we’re seeing less trade happening, and by a significant margin,” she said.

“We’re looking at a 10-15% reduction in trade this year, for the very simple reason that countries are hoarding it. They’re keeping it to themselves.”