Column-Global container freight still stalled: Kemp
By John Kemp
LONDON (Reuters) — Global industrial production and containerised freight flows remained in the doldrums at the start of the third quarter, confounding predictions earlier in the year for a strong rebound.
Manufacturers and distributors in North America and Europe were struggling to reduce excess inventories after the post-pandemic rotation from goods to services spending.
Rising interest rates and a cost-of-living squeeze have also dampened expenditure on expensive long-lived durable items.
Global industrial output was up by less than 1% in the second quarter of 2023 from the same period in 2022, according to the Netherlands Bureau for Economic Policy Analysis (CPB).
Such slow growth has been associated in the past with cycle-ending recessions or pronounced mid-cycle slowdowns (“World trade monitor”, CPB, August 25).
The volume of world trade was actually down by almost 2% compared with the same period a year earlier, a retreat that has always been associated in the past with outright recession.
As a result, global growth is entirely dependent on the services sector as consumers boost spending on travel, tourism and other personal services in reaction to the lockdowns of 2020-2022.
The commodities side of the economy is stuck in the doldrums as households pare back pandemic-era spending on products and businesses try to clear excess stocks.
Chartbook: Global container freight
In the United States, the volume of container trade handled through the nine largest ports in July was the lowest for the time of year since 2017.
The volume of container freight hauled on the major railroads in June was the lowest for the time of year since 2012.
Road freight has held up better than rail but it was still down by
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