TRENDS IN THE TRANS-ATLANTIC AND ASIA-EUROPE TRADES

Transcription

1 SEPTEMBER 2015 TRENDS IN THE TRANS-ATLANTIC AND ASIA-EUROPE TRADES Trade Projections for Trans-Atlantic, Asia-Europe in Mario O. Moreno, Senior Economist

2 The Trans-Atlantic, Asia-Europe Trades Modestly Improving in Divergent paths in the trans-atlantic trade: US imports from Europe outperforming US exports to Europe. The westbound trans-atlantic trade (US imports from Europe) will continue to post solid gains in Strong gains in US consumer and housing markets will support import trade growth (e.g. furniture, auto parts, etc.) from Europe. The eastbound trans-atlantic trade (US exports to Europe) underperforming but expect rebound in Euro to reach a low in January 2016 against dollar but rebound over Asia-Europe trade declining but expect rebound in Europe-Asia trade expected to stay stagnant. JOC Container Trade Europe / September

3 Trans-Atlantic 3

4 Divergent Paths in the Trans-Atlantic Trade JOC Container Trade Europe / September

5 Westbound Trans-Atlantic Trade in Upward Trend 2015 all time high: N Europe (2.1 mil. TEUs); Med (1.1 mil. TEUs). US Real GDP growth picked up to 3.7% in Q2, led by accelerations in consumer spending, building construction. Auto market: August light-vehicle sales hit strongest pace since July Housing: New construction improving on increased demand, lower supply side price pressures Cheap euro Westbound Trans-Atlantic In Millions of TEUs f N Europe Source: JOC Insights Med 5

6 Positive Outlook for the Westbound Trans- Atlantic Container Trade US economy to grow 2.8% in up from 2.5% in 2015, led by solid growth in consumer spending, residential construction Light vehicle sales (Mil. Units): in 2015; in 2016; in Housing starts (Mil. Units): 1.1 in 2015; 1.3 in 2016; 1.5 in 2017 Exist. House sales (Mil. Units): 5.3 in 2015; 5.6 in 2016; 5.7 in 2017 Favorable exchange rates 6.1% Westbound Trans-Atlantic: Forecast 10.8% 7.8% 7.2% 2.5% N Europe 11.3% 9.5% 7.0% Med 6.6% 6.2% 6.4% 4.8% Source: JOC f 2016f 2017f 6

7 Eastbound Trans-Atlantic Trade in Downward Trend 2015 trade: N Europe to total 1.4 mil. TEUs 85% of 2008 peak); Med to total 0.6 mil. TEUs 91% of 2008 peak. After expanding 0.7% quarter on quarter (q/q) 1Q15, Eurozone GDP growth was held back in 2Q by stagnation in France. Weak manufacturing activity Unfavorable exchange rates for US exporters Eastbound Trans-Atlantic In Millions of TEUs f N Europe Source: JOC Insights Med 7

8 Eastbound Trans-Atlantic Container Trade Expected to Moderately Rebound Through 2017 Eurozone to grow modestly by 1.6% in 2015; 1.7% in 2016; 1.8% in 2017 supported by easing credit conditions, a competitive euro, low oil prices, and reduced fiscal headwinds. Euro is expected to reach a monthly low of USD1.07 in January 2016 and gradually recover to USD1.25 by the end of Despite rebound through 2017, trade still will remain below peak. 8.1% -1.6% Eastbound Trans-Atlantic: Forecast Source: JOC N Europe 4.9% 2.1% 2.3% -0.5% Med 13.3% 10.0% 2.9% 4.1% -3.9% -4.4% -4.3% -4.8% f 2016f 2017f 8

9 Asia-Europe Trade 9

10 Asia-Europe Trade in Downward Trend JOC Container Trade Europe / September

11 Asia-Europe Container Trade Expected to Rebound in 2016 Asia-Europe Trade: Forecast Source: CTS; JOC Insights 5.2% 7.3% 8.1% Up 8.1% in 2016 to total approx million TEUs. Eurozone growth will improve slightly, aided by monetary stimulus, pent-up demand. Yen to depreciate against euro during % -3.6% f 2016f 11

12 The Europe-Asia Trade Forecast to Stay Unchanged in 2016 Unchanged in 2016 at approx. 7 million TEUs China s slowdown is impeding growth in export revenues across Asia. Weak Yen, Yuan against euro 4.3% Europe-Asia Trade: Forecast 5.5% Source: CTS; JOC Insights China Real GDP Growth (%) 1.4% 5 0 Source: IHS 0.8% 0.0% f 2016f 12

13 Summary The westbound trans-atlantic (US imports from Europe) trade is outperforming the eastbound (US exports to Europe) trade as US economy grows faster than most advanced economies in Europe. The euro expected to reach a low against US dollar in January 2016 and see a rebound during , boosting growth in the eastbound lane. Asia-Europe trade will contract this year but expect rebound in 2016 as slightly better economic conditions in Europe and favorable exchange rates boost demand outlook for Europe-Asia trade highly uncertain as emerging markets in Asia struggle with low commodity prices. 13

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