Boston: World ocean container trade activity is increasingly reflecting the slowdown in economies other than the already-weak US economy, according to financial analysts Global Insight. The body has revised downwards it near-term estimates of ocean container trade from the "already-weak volumes" forecasted for 2008 and 2009 on the back of what it calls the "accelerated deterioration in the economies of some of the developed countries in Europe and Asia".
"We have been concerned with the growing number of economic indicators for the European Union that point to a greater loss of consumer confidence thant had been previously anticipated," says Paul Bingham, managing director of Global Insight's Trade and Transportation Group. "Indicators now suggest that the EU is headed towards recession. Industrial production in the Eurozone fell 1.9% in May, according to recent Eurostat data, the sharpest drop since 1992. In Germany, the government is warning that the economy could contract by as much as 1.5%, while both Italy and Greece have seen industrial production slump 6.2%."
As a result Global Insight now believes that the annual growth rate on Far East-to-Europe trade will be no more than 2% in 2008, with some further downside risk remaining. For the Mediterranean/Black Sea, trade growth will likely drop to less than 4%. It also believes that "2009 will remain weak, as the recessionary tendencies will be slow to work themselves through towards recovery".
As regards US containerized imports Global Insight is now forecasting a decline of 8.2% in 2008, compared to a previous projection of a 7.1% decline. This revision is based mostly on a deteriorating outlook for imports through the Gulf ports.
One bright note, however, is the raising of the 2008 US export growth forecast from 17.7% to 22.6%. Major export destinations for which forecasts have been significantly raised upwards include Brazil, India, Indonesia, Malaysia, and South Korea. US containerised exports in first half 2008 grew 26.6% year-over-year but the that rate is expected to now slow, reflecting worsening production prospects in Europe and the appreciation of the US dollar. [15/09/08]
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