International trade can now be analysed from new perspectives thanks to the latest revision of the Broad Economic Categories (BEC, Rev.5) classification. One such perspective is the end-use of goods and services that can be imported or exported for final use (consumption) or as inputs to other economic activities (intermediate use). Goods can also be used for fixed capital formation. BEC Rev.5 is the first revision of BEC including also services, allowing for the first time an analysis on both goods and services by end-use.
The international trade in goods and services by end use are new experimental data that help global value chain (GVC) analysis.
Intermediate goods and services are particularly relevant in the analysis of GVCs, which comprise the full range of activities required to create a product, from its conception and design to sourced raw materials and intermediate inputs, marketing, distribution and support to the final consumer. Prime examples of GVCs are producers of cars, airplanes and phones, who source materials from different widespread geographical locations to assemble the products in a central location, a process made possible by low transport and labour costs and improved communication processes. Disruptions in the trade of intermediate goods and services cause serious problems for GVCs, as shown in the COVID-19 pandemic. When production of some intermediate goods in one location stopped, production of goods in other locations also came to a halt, showing the fragility of GVCs.
EU predominantly importing and exporting goods and services for intermediate use
The data show that extra-EU exports of goods and services returned to growth in 2021, after significant declines in 2020 due to the Covid-19 pandemic.
Exports of final services were the most affected with a 38 percentage point (pp) drop from 2019 levels, due to the collapse of the travel item (expenditure of foreign tourists and travellers). Although growing again, exports of final services, as well as exports of capital goods, have still not returned to their pre-pandemic levels.
In contrast, the exports of intermediate services were the least affected by the pandemic, with a decline of only 4 pp between 2019 and 2020, followed by a strong recovery in 2021, reaching a record level of 122 index points. Although to a lesser extent, a similar development was observed for exports of intermediate and final goods (peak of 113 index points in 2021).
Like exports, total extra-EU imports of goods and services fell in 2020 compared to 2019 levels, with the largest fall again in final services (-35 pp). In 2021, imports of services, both final and intermediate, have still not returned to their pre-pandemic levels. It should be noted that imports of intermediate services even continued to decline between 2020 and 2021.
In contrast, imports of goods whether intermediate, final or capital goods, have all recovered and even exceeded their pre-pandemic levels. Imports of intermediate goods have even reached a record level (peak of 120 index points in 2021).
For more information:
- Statistics Explained article on international trade in goods and services by end use
- Dedicated section on international trade in goods
- Database on international trade in goods
- Education Corner workbook on international trade in goods
- Dedicated section on international trade in services
- Database on international trade in services