[070211.EN.SEA] Too Early To Panic As Economic Indicators Point To Solid Demand In 2011

MUCH attention has been directed at the growth in container shipping capacity this year, leaving many commentators a little pessimistic on the industry’s outlook.  However, little attention is being paid to the positive news coming out of one of the most important consumer markets, the US, which indicates that demand could be quite healthy this year.  Retail spending in the US for the month of December was up by nine per cent year on year, and 0.7 per cent over the previous month, according to the latest figures.  Meanwhile, US unemployment dipped by 0.4 per cent month on month in December, where the rate now stands at a low of 9.4 per cent, a fact that analysts at Barclays Capital are betting will pay off for the shipping industry going forward.  "We view this marginally improving US employment situation as a potential driver of incremental container volume growth over 2011,” the analysts said. Another potential container shipping demand growth driver is the low US inventory-to-sales ratio, which according to the latest figures released currently stands at 1.25, well below the long term trend-line, Barclays said.  This indicates that we will likely see a boost in demand through retailers’ restocking efforts in the coming months.  The US dollar rose earlier this week to $1.359 per Euro versus 1.367 per Euro last week on the back of increasing consumer confidence this month and positive economic data emerging from fourth quarter results, according to Business Week. The US Conference Board’s confidence index rose to 54.2 in January from 52.5 in December, while fourth quarter GDP grew by 3.5 per cent year on year, all of which points to a positive economic outlook for the US in 2011.

Source : CSM, 27.01.11.