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TRANS-PACIFIC CONTAINER TRADE OUTLOOK 2010-2011
By Mario O. Moreno, Economistmmoreno@piers.comPIERS Maritime Research
March 2010
2
Presentation
A brief assessment of the U.S. economic recovery and its impact on Trans-pacific container trade
Forecasts for total containerized U.S. imports and exports, and U.S. container trade with Southeast Asia and Northeast Asia (China, Japan, Korea, Hong Kong, Taiwan) for 2010-11
Latent risks to the Trans-pacific container trade rebound during the forecast period
3
The Asia-Pacific Region will Experience a Stronger Recovery than the U.S.
The IMF recently upgraded its forecast for U.S. GDP and said the U.S. will expand 2.7% this year, slowing down to 2.4% in 2011.
ASEA-5: Indonesia, Malaysia, Philippines, Thailand, Vietnam.
2007 2008 2009 (e) 2010 (f) 2011 (f)
U.S. 2.14 0.4 -2.4 2.7 2.4
ASEA-5 6.3 4.7 1.3 4.7 5.3
China 13 9.6 8.7 10 9.7
India 9.4 7.3 5.6 7.7 7.8
-3.0
-1.0
1.0
3.0
5.0
7.0
9.0
11.0
13.0
GDP: U.S., ASEA-5, China, India
Y/Y
perc
ent
change
Source: IMF
e: estimatef: forecast
4
A Sustainable U.S. Economic Recovery … or Is It?
1.15
1.20
1.25
1.30
1.35
1.40
1.45
1.50
Inventory to Sales ratio 1.26
Inventory to Sales RatioSource:Census Bu-reau
Dec-0
7
Mar-0
8
Jun-
08
Sep-
08
Dec-0
8
Mar-0
9
Jun-
09
Sep-
09
Dec-0
9$260,000
$270,000
$280,000
$290,000
$300,000
$310,000
$320,000
-10.0
-8.0
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
Retail Sales less autos
RS exc autos % Change
In $
millions
% c
hange f
rom
a y
ear
ago
Source: Census Bu-reau
Retail sales excluding autos up 4.6% from a year ago
The business inventory to sales ratio is down at 1.26
5
Cont’d
-3.0
-2.0
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
Consumer Price Index
Core CPI CPI
% c
hange f
rom
a y
ear
ago
Source: BLS
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
Index 58.4
ISM Manufacturing IndexSource: ISM
Inflation remains subdued. Last year, overall consumer prices slipped 0.4%. As of January 2010, year-on-year overall CPI is at 2.7% and Core CPI is at 1.5%.
The ISM index rose sharply in January 2010, driven by a red-hot pace of new orders.
6
Forecast: Total U.S. Imports in TEUs
U.S. total imports in TEUs are expected to grow 9.1% in 2010 mainly due to inventory re-stocking.
In 2011, imports growth is expected to be lesser due to fading stimulus and distressing consumer spending.
2006 2007 2008 2009(e)
2010(f)
2011(f)
2006 2007 2008 2009(e)
2010(f)
2011(f)
Imports
18576313.29
18476451.65
17091763.14
14508078.84
15829036.9085446
16807923.3504997
% change
0.0719038265376061
-0.00500000000000001
-0.07
5
-0.15116544735613
3
0.0910498270041524
0.0618411876610584
1,000,000
5,000,000
9,000,000
13,000,000
17,000,000
-17.5%-12.5%-7.5%-2.5%2.5%7.5%12.5%
Containerized U.S. imports
TEU
s
Y/Y percent change
Source: PIERS
7
Forecast: Total U.S. Imports in TEUs (Quarterly)
Total containerized U.S. imports ended at 3,830,000 TEUs in the 4th quarter of 2009, accounting for a drop of only 5% over the same quarter in 2008.
09 Q1
09 Q2
09 Q3
09 Q4
10 Q1
10 Q2
10 Q3
10 Q4
09 Q1
09 Q2
09 Q3
09 Q4
10 Q1
10 Q2
10 Q3
10 Q4
Imports
3281557.98
3509874.04
3885836.82
3830810
3672772.99999999
4047214
4146908.71783975
3962141.19070486
% change
-0.208199014062924
-0.193484353193496
-0.148296486042202
-0.0501369971970618
0.11921624496179
0.153093801622578
0.0671855021024143
0.0342828776955428
250,000
1,250,000
2,250,000
3,250,000
4,250,000
-22.5%
-12.5%
-2.5%
7.5%
17.5%
Containerized U.S. imports
TEU
s
Q/Q
percent change
Source: PIERS
8
Forecast: Total U.S. Exports in TEUs
Containerized U.S. exports are expected to grow 7.3% in 2010 due to a stronger economic recovery in the Asia-Pacific region and to lower prospects of a significant appreciation of the U.S. dollar.
2006 2007 2008 2009(e)
2010(f)
2011(f)
2006 2007 2008 2009(e)
2010(f)
2011(f)
Exports
9113624.49
10776281.06
11361070.36
10376664
11130766
11766492
% change
0.0534937454196085
0.182
0.054
-0.08
7
0.073
0.0574109271599828
1,000,000 3,000,000 5,000,000 7,000,000 9,000,000
11,000,000 13,000,000
-12.5%-7.5%-2.5%2.5%7.5%12.5%17.5%
Containerized U.S. exports
TEU
s
Y/Y percent change
Source: PIERS
9
Forecast: U.S. – Northeast Asia Trade in TEUs[China, Japan, Korea, Hong Kong, Taiwan]
The exports growth projection for 2010 is based partially on the ability of China thus far to avert a major recession and partially on income expectations.
2006 2007 2008 2009 (e) 2010 (f) 2011 (f)
Exports 0.086 0.141 0.036 -0.0142265500307
256
0.0873167517009
505
0.0770323602062
951
Imports 0.096 0.012 -0.0840000000000
001
-0.1581262863131
93
0.1269554700685
41
0.0782576860439
892
-17.5%
-12.5%
-7.5%
-2.5%
2.5%
7.5%
12.5%
17.5%
U.S. – Northeast Asia Container Trade
Y/Y
perc
ent
change
Source: PIERS
Exports
Imports
10
Forecast: U.S. – Southeast Asia Trade in TEUs
[Vietnam, Indonesia, Thailand, Singapore, Philippines, Malaysia]
Without a doubt, Indonesia and Vietnam are the standout performers and will continue to thrive in 2010 and 2011.
2006 2007 2008 2009 (e) 2010 (f) 2011 (f)
Exports 0.009 0.352 0.193 -0.0810652294126
118
0.0566999325762
048
0.0625438338102
289
Imports 0.051 -0.0060000000000
0001
-0.042 -0.1106817222340
12
0.1256578283657
11
0.0947627835988
037
-15.0%
-5.0%
5.0%
15.0%
25.0%
35.0%
U.S. – Southeast Asia Container Trade
Y/Y
perc
ent
change
Source: PIERS
Imports
Exports
11
Top 5 Commodities: Northeast Asia[China, Japan, Korea, Hong Kong, Taiwan]
FURNITURE
TOYS
FOOTWEAR
WOMEN'S&INFANTWEAR
PLASTIC PRODS, MISC
247,124
145,164
97,263
77,857
74,765
TEUsPIERS2009 Q3
PAPER&PAPERBOARD
MIXED METAL SCRAP
PET&ANIMAL FEEDS
GRAINS&FLOUR PRODS
METAL SCRAP,FERROUS,PIG
IRON
289,887
92,676
57,948
53,875
51,005
TEUsPIERS2009 Q3
Top 5 U.S. import commodities from Northeast Asia
Furniture decreased -19% in the 3rd quarter of 2009 over the same quarter a year ago
Top 5 U.S. export commodities to Northeast Asia
Paper & paperboard surged 9.8% in the 3rd quarter of 2009 over the same quarter a year ago
12
U.S. Exports of “Grains & Flour prods” to Southeast Asia will Remain Strong
From January through September of 09 the U.S. exported 65,917 TEUs of the mentioned commodity, which translates into a 19% increase over the full previous year.
2009*: January through September 2009
2004 2005 2006 2007 2008 2009* 2004 2005 2006 2007 2008 2009*
TEUs
15620
9438.56
15780.8599999999
46117.97
55291.68
65917.16
% change
0.395230847285644
-0.395738796414855
0.671956315370144
1.92239903275233
0.198918339207039
0.192171408067181
5,00015,00025,00035,00045,00055,00065,000
-75.0%-25.0%25.0%75.0%125.0%175.0%225.0%
U.S. exports of “grains & flour prods” to Southeast Asia
TEU
s
Y/Y percent change
Source: PIERS
13
What Could Go Wrong?
Inflation and property bubbles in Asia
Tightening monetary policy too fast
Tensions in U.S. – China trade relations
Enduring pullback of the American consumer
14
A Jobless Recovery
We have lost over 8 million jobs since the recession began. In fact, there are over 1 million discouraged workers who are not even considered in the national unemployment rate calculation
-1000
-800
-600
-400
-200
0
200
-6.0
-5.0
-4.0
-3.0
-2.0
-1.0
0.0
1.0
2.0
Nonfarm Payrolls: Monthly and Yearly Change
Monthly Yearly %
Thousands,
month
ly c
hange
% C
hange y
ear
ago
Gain of 64,000
Loss of -150,000
Source: BLS
15
The Over-extended American Consumer
2006 2007 2008 20090
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6 Personal Bankruptcy Filings 1.41
Personal Bankruptcy Fil-ings
In m
illio
ns
Source: American Bankruptcy In-stitute
2007 2008 20090
0.5
1
1.5
2
2.5
3
Foreclosures 2.8
Foreclosures
In m
illions
Source: Realty-Trac
Foreclosures and job losses have prompted more people to resort to bankruptcy protection in 2009.Housing market still fragile.
21%
120% 32%
16
New Frugality
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
PS (Monthly %) 4.8
Personal Saving Rate
PS a
s a %
of
Dis
posa
ble
Inco
me
Source:Census Bureau
Dec-0
7
Mar-0
8
Jun-
08
Sep-
08
Dec-0
8
Mar-0
9
Jun-
09
Sep-
09
Dec-0
9
-25.0
-20.0
-15.0
-10.0
-5.0
0.0
5.0
10.0
15.0
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
Consumer Credit Outstand-ing
Monthly change % Change
In $
billions
% c
hange f
rom
a y
ear
ago
Source:Federal Reserve
A high saving rate suggests consumers are changing their spending patterns and are trying to steady their finances.
U.S. consumer credit fell for the 11th straight month, indicating consumer spending will be restrained by a combination of tightened standards for credit and Americans reluctant to take on more debt until hiring picks up.
TRANS-PACIFIC CONTAINER TRADE OUTLOOK 2010-2011
By Mario O. Moreno, Economistmmoreno@piers.comPIERS Maritime Research
March 2010
www.piers.com
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