Services trade growth slows in first quarter of 2025

Services exports in Europe and North America increased by only 3% year-on-year in the first quarter of 2025, down from 8% and 11% respectively in the first quarter of 2024. In contrast, strong growth was sustained in Asia at 9%.

The overall slowdown in services trade was mainly due to “Other commercial services,” a category that encompasses a wide variety of mostly digitally deliverable services ranging from financial to professional services (Chart 1). In 2024, “Other commercial services” accounted for some 60% of global services trade, with Europe contributing 40% of those exports (Chart 2).

Chart 1: Commercial services trade growth by main sector, 2024Q1-2025Q1
Year-on-year % change

Note: Services trade measured as exports.
Source: WTO-UNCTAD estimates.

Chart 2: Structure of world exports of commercial services, 2024
% shares

Source: WTO-UNCTAD estimates.

 

Chart 3 shows a deceleration across selected subsectors of “Other commercial services” in the first quarter of 2025 compared with the same period of 2024. Growth in “Other business services,” covering various professional, technical and trade-related services, as well as research and development services, moderated. The United States posted a subdued 4% year-on-year increase in “Other business services” following an 8% expansion in the same period of 2024. Exports by the European Union remained flat in US dollar terms, although they rose by 4% when measured in euros.

Financial services exports grew by only 3% year-on-year in the first quarter of 2025, reflecting reduced investment activity amid increased global economic uncertainty. The sector was also affected by exchange rate movements, which dampened US dollar-denominated growth. Exports from both the European Union and the United States rose just 2% year-on-year while Switzerland's exports fell by 3%. The United Kingdom, on the contrary, posted a robust 10% year-on-year increase sustained by double digit growth in exports to the United States (+13%).

Intellectual property related services expanded by 4% year-on-year in the first three months of 2025 in comparison with a 7% growth in the same quarter of 2024. Global trade in IP-related services remains highly concentrated, with the European Union and the United States accounting for nearly 70% of exports in 2024. EU exports, measured in US dollars, rose by just 3% year-on-year, held back by exchange rate volatility, despite stronger underlying growth of 6% in euro terms.

Global construction exports fell by 15% year-on-year in the first quarter of 2025, reversing part of the strong 25% growth recorded during the same period in 2024. The decline reflects weaker performance across several key economies, including China (-25%), which alone accounted for over 28% of global construction exports in 2024, the Republic of Korea (-15%), and the European Union (-6%). The downturn in the first quarter likely reflects delayed investment due to uncertainty and rising costs.

Computer services exports were only marginally affected by the broader slowdown, as strong global demand for artificial intelligence (AI), digital transformation, and cybersecurity solutions continued to drive growth. This momentum is expected to persist, supported by ongoing business adaptation to new technologies and rising consumer preferences for digital services. During the period, India’s computer services exports grew by 13%, while Ireland recorded a 9% increase.

Chart 3: Other commercial services exports by selected subsector, 2024 and Q1 2025
Year-on-year % change

Note: Sectors are ranked according to their relative share in services trade in 2024.
Source: WTO estimates for Q1 2025 and Q1 2024; WTO-UNCTAD estimates for 2024.

 As for the other main sectors of commercial services, global transport exports were up 3% year-on-year in the first quarter of 2025, following rapid growth especially in the third and fourth quarter of 2024 due to frontloading. Asia recorded the fastest growth, up 10%, driven by a 31% rise in China, while Singapore and the Republic of Korea posted modest gains of 2%. Payments for shipping services increased by 19% in South and Central America and the Caribbean, as demand for goods surged.

Despite a difficult economic and geopolitical context, international travel expanded by 5% year-on-year in the first quarter of 2025. For the first time since the pandemic, international tourist arrivals were 3% above 2019 levels according to UN Tourism data. In Asia, travel receipts grew by 13%, driven by China (+96%), Viet Nam (+33%), Japan (+25%) and Thailand (+18%) as tourism continues to recover in the region. By contrast, North America's travel receipts fell by 1%.

Services trade performance varied across major traders in the first five months of 2025 according to available monthly statistics. Double digit exports growth was recorded in Asian economies such as China (+13%, through June), India (+12%) and Japan (+11%). In North America, the United States and Canada saw diverging trends. US service exports rose by 5%, while Canada recorded a 6% decline. The EU’s service exports to non-member countries rose by 3%, while imports from outside the Union grew more sharply, increasing by 6%. The United Kingdom recorded marked growth, with exports up 9% and imports rising by 13%.

Chart 4: Services export and import growth of selected economies, January-May 2025
Year-on-year % change

Note: Statistics for Brazil, China and Pakistan refer to January-June.
Source : National sources and Eurostat.

Quarterly statistics are estimates as of time of publication and subject to frequent revisions. They are available for download at WTO Stats, as well as monthly statistics. Annual services trade data and related visualizations can be accessed at WTO | Statistics — Global Services Trade Data Hub and WTO | World Trade Statistics 2024.