American consumers are using their credit cards again, and forecasters expect retail sales and containerized imports to accelerate modestly this year.
“We remain firm in our view that there will be growth this year, coming primarily in the second half,” said Ben Hackett, founder of Hackett Associates, which produces the monthly Global Port Tracker report for the National Retail Federation.
The latest Port Tracker forecast that flat container volume in January would give way to “a sustained period of low growth” starting this spring. Hackett expects year-over-year import growth will exceed 4 percent in West Coast ports, where volume is dominated by retail cargo, and about 2 percent at East Coast ports.
Journal of Commerce Economist Mario O. Moreno has a similar outlook. He said he may raise his recent forecast of a 2.8 percent increase in total U.S. imports as economic indicators continue to improve. “I think this will be a positive year for imports,” he said.
The Commerce Department said retail sales revenue slowed in December but totaled a record $4.7 trillion in 2011, up 6.4 percent from the previous year.
The National Retail Federation expects retail industry sales excluding automobiles, gasoline and restaurants to rise 3.4 percent to $2.5 trillion this year, compared with 4.7 percent growth in 2011. Most economists expect GDP to rise 2.1 to 2.4 percent.
Each percentage point rise in retail sales usually results in about a 1.5 percent increase in retail-oriented imports, Hackett said.
That ratio has been lowered slightly by the prolonged housing slump, which has depressed imports of bulky goods such as furniture. Recovery in housing will spur demand for furniture, which accounts for about 10 percent of U.S. containerized imports.
This year’s outlook is positive despite high unemployment, commodity inflation, slow income growth, a weak housing market and consumer confidence that is improving but still fragile.
Hackett said adverse developments in the eurozone sovereign-debt crisis could affect the overall economy, and that political bickering in Washington isn’t helpful. But he said a gradually recovering job market is encouraging consumers to indulge pent-up demand, even if they have to dip into savings to do it.
“Continuing uncertainty and the run-up to the elections raise a cloud, as does the pressure on declining incomes as firms hire at lower rates,” he said. “Nevertheless, the consumer managed to increase savings during most of 2011 and now has a tidy safety net from which to increase consumption as the risk of unemployment recedes. All of these indicators suggest that we are not heading for another recession, but rather for a sustained level of low growth.”
Hackett expects U.S. retail sales, both at stores and online, to remain “in marginally positive territory for the first five months of this year before declining for the summer months and then ramping up for the back-to-school and holiday seasons.”
After several weeks of full ships before Chinese factories close for the Jan. 23 start of the Lunar New Year celebration, volumes will slump in February before companies begin to restock.
But carriers hoping for a surge in inventory building by retailers are likely to be disappointed. Companies reacted to the recession by tightening inventories, a trend that shows no sign of reversal.
The ratio of total retail inventory to sales stood at 1.35 in November, down from 1.72 at the recession’s low point in early 2009, Commerce Department data show.
“Retailers understand there’s a cost to inventory, and they’ve learned to balance inventory levels with consumer demand,” said Jonathan Gold, the National Retail Federation’s vice president for supply chain and customs policy.
Technology has helped retailers become more adept at keeping stockpiles low, and executives know Wall Street is watching.
“More and more we are looking at inventory levels,” said Deborah Weinswig of Citibank Investment Research.