2017 growth forecast for US container imports is downgraded
IHS Markit senior economist Mario Moreno has lowered his growth forecast for US imports in 2017, from 6.6 per cent to 5.3 per cent, and predicts the country will import a total of 21.7 million TEU this year.
Mr Moreno said his downgrade was prompted in part by the "lower-than-expected performance in the second quarter," and diminished demand for auto parts, the US' second largest import category, reported IHS Media.
The reduction jars slightly with the confidence of the container shipping industry that cargo volumes are way ahead of those last year, and that could lead to a far more profitable year for ocean carriers. Some analysts believe demand growth will outstrip the increase in vessel capacity, and push up rates.
Maritime analyst Drewry in July predicted carriers would net US$5 billion in profit this year, after six years of losses, as a result of higher rates and volume.
CMA CGM reported a second-quarter profit of $219 million, compared to a loss in the 2016 quarter, and Maersk Line reported its first profit in five quarters. Carriers OOCL, "K" Line, and Zim Integrated Shipping Services each saw greater increases in unit revenue than volumes.
Mr Moreno, a maritime analyst, cited the "modestly slow pace" of 3.3 per cent real spending on goods - slower than in 2016 - as one reason for his downgrade of the growth rate for US imports. He expects spending to pick up a little in 2018 for a 3.7 per cent growth.
Although imports got a slight boost this year from the softening exchange rate of the dollar, "import prices (excluding oil) are forecast to stabilise this year after falling for two consecutive years," Mr Moreno said. However, he expects growth of new light vehicles to pause this year as "pent-up demand has already played out."
"With domestic production of auto parts strengthening, the outlook for second-ranked import auto parts continues to look grim in the short run," he added.