The Airports Council International (ACI) reported that air cargo tonnage is flat for the start of 2016, rising only 0.6% in May, over May 2015, though passenger traffic was up 4.6% year-over-year. Though the airfreight market is volatile competition from expanded ocean vessels, reductions in bunker costs and trucking play a large part in the stall. According to Air Cargo World “The Middle East reported a 3.3 percent growth, y-o-y, in total freight for May, followed by Europe, which rose 2.7 percent, and Asia-Pacific, up 1.4 percent, y-o-y. North America, Latin America-Caribbean and Africa all saw their air freight decline, down 1.5 percent, 3.9 percent and 5.7 percent, respectively.” While overall airfreight growth shows a general decrease North America, domestic freight rose 3.1% through May, compared to the same in 2015.
After the UK’s vote to leave the EU in June, the IMF has downgraded global growth projections for 2016 and 2017. Expecting a 3.1% growth rate for 2016 and 3.4% in 2017, the IMF reduced original projections by 0.1% due to global market uncertainty, exacerbated by the Brexit vote. “The Brexit vote implies a substantial increase in economic, political, and institutional uncertainty, which is projected to have negative macroeconomic consequences, especially in advanced European economies,” IMF said in its latest World Economic Outlook Update. While most financial markets have completely recovered from any post-Brexit issues, more blowback is expected to reveal itself over the next year, already shorting projections for the UK economy to only a 1.7% growth in 2016. The IMF decreased its forecast for U.S. growth in the 0.2 points to 2.2% due to poor growth in the first quarter 2016.
BCS Placement understands how important global outlooks and growth are for the future of employment. While we’re watching the projections slow and experiencing some intense uncertainty, the strength of the global supply chain market, airfreight included, is bolstered by strong ocean and trucking sectors. Airfreight growth should start to revitalize once the questionable issues surrounding Brexit and the U.S. elections complete their cycle.