European economy continues to impact ocean volumes, says Global Port Tracker report
October 31, 2012 - LM Editorial
A confluence of ongoing events, including the debt crisis hitting exports, domestic sales and consumer confidence and imports, which have added to declining trade volumes, has led to a recession being formally declared in the European Union, according to the most recent edition of the Global Port Tracker report from Hackett Associates and the Bremen Institute of Shipping Economics and Logistics.
Ports surveyed in this report include the six major container reports in North Europe: le Havre, Antwerp, Zeebrugge, Rotterdam, Bremen/Bremerhaven, and Hamburg.
“Last month eurozone consumer and business confidence fell for the fourth straight month, weakening significantly in France, Germany, Finland, and Austria,” said Ben Hackett, president of Hackett Associates, in the report.
These comments are not surprising, considering how long the European economy has been in decline, coupled with the fact that in last month’s report Hackett explained that the consumer confidence index as measured by the EU Commission continues to decline. The index, he said, is now dangerously low compared to its long term trend, with the exception of the 2009 recession.
The Global Port Tracker report noted that total European imports are projected to drop 2 percent to 21.19 million TEU (Twenty-foot Equivalent containers) in 2012, and exports expected to increase 3.3 percent to 16.69 million TEU.
And the total handled volume forecast for 2012, according to the report is 39.97 million TEU, which is a 0.2 percent annual improvement. Outgoing loaded containers are projected to decrease by 4 percent over the next six months compared to a 0.1 percent gain over the same timeframe for the previous year. What’s more, the report is calling for only two of the next four quarters currently forecasted to post growth annually for both incoming and outgoing containers. For the six North Range ports, the report said that incoming volumes are expected to drop 0.6 percent in 2012 to 16.4 million TEU.
“On the European side, things have slowed down dramatically,” Hackett told LM in a recent interview. “There is a lack of confidence [as noted in economic metrics] and GDP is down and sales are weak. It is clear that there is a slowdown. And nothing has really been done to solve the key issues like the Euro crisis and sovereign debt crisis, so the next 12 months are going to be critical.”
Should the situation in Europe continue to worsen, it could have a trickle down effect on the United States economy, too, in the form of lower consumer confidence, Hackett explained. This would likely lead to a higher personal savings rate in the U.S. with the after effect being lower trade levels, with the warning signs on the economy intact.
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