Tuesday, May 28, 2013

Air cargo industry's woes may point to weakness in Asia's growth

One of the leading indicators analysts often look to in order to understand economic trends is the air cargo volume. For example, according to Reuters, Singapore's Changi Airport "moved 1.8 percent less cargo in April from a year ago". That's a potential indication of weakness in demand not just in Singapore, but across Asia's other economies.

The health of the air cargo industry is also plagued by another (related) factor: overcapacity. Singapore Air for example just announced it is mothballing its second cargo plane since December of last year.

This combination of global economic weakness and overcapacity has resulted in a sharp decline in ISI's air cargo industry survey. And unless Apple comes out with another high-demand product, things don't look good for the industry. This may also be a signal that the relative weakness across some of Asia's major economies is worse than many had assumed (we may already be seeing signs of that in China's latest PMI numbers) .

Source: The ISI Group ("iPad Launch" refers to iPad 2 and iPad "3d generation")  

From our sponsor:
Related Posts Plugin for WordPress, Blogger...
Bookmark this post:
Share on StockTwits