IATA: Global airfreight resumes 'modest trend upwards', but remains 'significantly slower' than 2017

IATA reported (04-Jul-2018) global FTKs increased 4.2% year-on-year in May-2018, slightly down from 5.2% growth in Apr-2018, with growth in all regions except Africa. AFTKs increased 6.2%, marking the fourth consecutive month in which capacity outgrew demand. IATA stated: "After a weak start to 2018, demand for global air freight has now resumed a modest trend upwards. However, the rapid growth seen in 2017 is now over, with demand growing at a significantly slower pace in 2018". IATA expects airfreight demand to grow by a "modest" 4% in 2018. The association outlined the following indications that growth will continue at a slower pace:

• The re-stocking cycle, which required quick delivery to meet customer needs, is over;
• The new export orders component of the global manufacturing purchasing managers' index is at a 21 month low;
• Global trade appears to be softening as trade tensions increase;

IATA director general and CEO Alexandre de Juniac said: "Headwinds are strengthening with growing friction among governments on trade. We still expect demand to grow, but those expectations are dampened with each new tariff introduced. Experience tells us that trade wars, in the long run, only produce losers". IATA noted the following regional highlights for May-2018:

• Africa: After a surge in international FTKs in 2017, seasonally adjusted international volumes have now trended downwards at an annualised pace of 15% over the past six months, mainly reflecting a softening in demand in markets to/from Asia and the Middle East;
• Asia Pacific: There are signs that demand is accelerating for international FTKs, but the risks from protectionist measures are disproportionately high as the region accounts for close to 37% of global airfreight;
• Europe: Seasonally adjusted volumes rose slightly over the past two months, however the annualised rate of growth over the past six months remains low at 1.5%;
• Latin America: Recorded the largest growth in demand of any region for the third consecutive month. The pick up in demand over the last 18 months parallels signs of economic recovery Brazil. Seasonally adjusted international volumes surpassed the May-2014 peak in May-2018;
• Middle East: Carriers recorded "a significant deceleration in demand" from 6.9% volume growth in Apr-2018 to 2.4% in May-2018. IATA said the decrease mainly reflects developments from 2017 rather than a substantive change in the current freight trend. Seasonally adjusted volumes continue to trend upwards at a "modest" pace by the region's standards, consistent with signs of a broader moderation in global trade;
• North America: Recent momentum of the US economy and the US dollar helped strengthen demand for air imports. US Census Bureau data shows a 12% increase in air imports in Apr-2018, compared to 2.4% in Mar-2018. [more - original PR]