The Global economy outlook is negative for the near future. It seems that another recession is on the very next bend for the global economy, after the one experienced during 2008/2009. As a result, oil consumption growth will decrease. Major global trade indicators seem to point toward an impending global economy recession.
Shipping freight volumes through major shipping ports such as Singapore and Long beach, as well as air cargo transported thought major airport hubs such as London, Frankfurt, Memphis and Hong Kong are either flat or down compared with those of the respective time periods in 2018.
Airborne cargoes are also mentioned above because, even though the same cater for the transportation needs of the most valuable and time-sensitive merchandise, they are generally a good indicator for the rest of the cargo sector and the broader worldwide economy.
Regarding seaborne trade which is of interest, indicatively the container volumes traded through California’s Long Beach- the largest terminal for transpacific trade- fell by 10% in the March-May period compared to the same period of 2018. That is the worst performance of container trade in this specific major hub port since 2015/2016.
Although seaborne container volumes traded through Singapore- another major container shipping hub- were up 1% during the same period fo March-May of 2019 compared with the respective period of 2018, the container volume growth has declined from 16% in the first quarter of 2018. Future freight indicators seem to predict that said trade volume growth decline or slowdown is likely to continue during the rest of 2019 and might as well turn into an outright worldwide economy fall.
Along the same line, the World Trade Organization’s (WTO) trade outlook indicator has declined to its lowest point since 2010, pointing towards a continued decrease in worldwide trade volume growth. Furthermore, the OECD’s composite leading indicator of the advanced economies and major emerging markets’ economic activity dropped to its lowest level since the crisis of 2008/2009. Interestingly and rather consistently, whenever the OECD indicator had dropped this low ever since 1970, the US economy has always entered into a recession and has been followed by the other advanced industrial economies of the world.
Unless action is taken to turn the tide, the above global economy downturn will deepen in the following 6 months…
Source: Reuters (Editing by Dale Hudson), by Hellenic Shipping News