The DHL Global Trade Barometer forecasts for global air trade dropped six points from March to a new index of 49, indicating a slight contraction over the next three months.
Most countries are expected to see air trade decline, with the largest contractions expected in Japan (-11 points) and the U.S. (-8 points). Further declines are expected in India (-7 points), Germany (-6 points), China (-6 points) and South Korea (-3 points).
The U.K. is an exception to this forecast, with a projected six-point increase in air trade growth. The prediction fits with recent results from a survey run by Royal Mail, the country’s postal service, that suggests e-commerce traffic from the country will increase in the near-term. Over the coming summer months, 39% of SME retailers in the U.K. expect to see an increase in overseas sales, and 66% expect an increase in sales overall.
The overall trade index fell eight points to 48, only three points below growth. DHL speculated that a shift in trade routes and supply chains might be softening the global impact of the trade conflict between the U.S. and China.
Vietnam, for instance, approved the construction of the new Long Thanh International Airport last month to meet traffic demand as factories shift to Southeast Asia from China, in hopes of dodging tariffs and finding cheaper labor costs. Newsweek reported that, in the first quarter of 2019, U.S. imports from Vietnam increased 40.2% y-o-y even as imports from China decreased 13.9%.
Airports in Southeast Asia overall were among the fastest growing in the world as of January. Turkish Cargo launched new freighter services in the region last fall, and surrounding airports – including Incheon (ICN), Singapore (SIN), Hong Kong (HKG) and Taiwan (TPE) – are actively encouraging flights south and pushing for more rights for national carriers in ASEAN countries.
Even still, the most recent forecast from DHL predicts the first contraction since the barometer was launched in January 2018 for global trade. That shift, DHL pointed out, is mostly thanks to steep plunges in the overall forecasts for China (-7 points) and the U.S. (-11 points).Like This Post