Recovery a Year Off: JOC Poll

A majority of the attendees at The Journal of Commerce's 9th annual Trans-Pacific Maritime Conference don't foresee an economic recovery for at least another year, according to live poll questions asked during the most recent conference.

In addition, seeing the surge in trans-Pacific volumes during the 2002-2006 expansion as linked to unsustainable U.S. consumer spending and debt accumulation, attendees do not expect trans-Pacific containerized trade to return to growth rates seen during this period of robust expansion leading up to the recession.

In an indication of the group's downbeat outlook, 76 percent of the attendees said they believed the U.S. economic recession will officially end in 2010 or 2011. Only 4 percent of attendees expect the U.S. recession to end this year, in contrast to some economists who are forecasting a return to growth by the 3rd quarter. Similarly, 40 percent of attendees don't see growth returning to trans-Pacific volumes until 2011 while only 8 percent see growth resuming this year. Fully 60 percent say they will handle fewer containers this year than last year.

"The trans-Pacific eastbound container market is a direct reflection of consumer spending and housing and those have all been among the hardest hit segments of the economy," said Paul Page, editorial director of the Journal of Commerce. "Consider that for all of 2008, real U.S. GDP grew 1.1 percent while trans-Pacific import volumes fell 7.6 percent, more than seven times the rate of decline of the economy overall."

The poll questions were asked over two days at the 2009 TPM, held March 2-3 in downtown Los Angeles. Attendees were asked to respond to a series of live poll questions posed by moderators during the conference sessions.

Attendees also believe that long-term growth rates for trans-Pacific import volumes are slowing. The average rate of growth from 2002-2006 was 12.1 percent, driven by what many now see as unsustainable consumer spending levels. By a 65-35 margin, attendees said they do not believe the eastbound trans-Pacific will return to growth rates seen during this period, underscoring the view that the largest U.S. trade lane may be entering a long-term period of slower growth rates.

An unstable banking system, rather than protectionism, was seen as the biggest threat to global trade. Banking beat out protectionism by 45 percent to 26 percent.

Contact Marcy Frank at mfrank@joc.com .