Aging cars require replacement parts and generate new-vehicle sales. When people move, they tend to buy new furniture. And when money is tight, they delay purchases of clothes and limit spending on discretionary goods such as toys.
Trends such as these underpinned a 3 percent increase in U.S. containerized imports last year and support predictions of similar volume gains in 2012.
Journal of Commerce Economist Mario O. Moreno said he remains cautious about 2012, despite higher-than-expected volume in 2011’s fourth quarter. He plans to update his early-December forecast of 2.5 to 3.5 percent growth later this month.
“The overall economy continues to recover in a stubbornly slow fashion, which makes it highly vulnerable to shocks,” Moreno said. But he noted the economy is showing signs of recovery in sectors such as autos and housing.
December container import volume rose 2.4 percent year-over-year, following a 5.2 percent jump in November. Imports in the fourth quarter increased 1.5 percent, despite a 0.9 percent decline in eastbound trans-Pacific volume.
Imports of auto parts jumped 19 percent in December from a year earlier, benefiting from a rebound in U.S. vehicle production and a rise in aftermarket sales. For the year, parts imports rose 22.8 percent to 630,784 TEUs. Moreno expects further increases this year, though probably at a slower pace.
Analysts forecast U.S. light-vehicle production will rise 10.5 percent this year to about 14.5 million vehicles. That would be the highest since 2007 when 15 million vehicles were produced, but still well below the peak of nearly 17 million units earlier in the decade.
Detroit’s Big 3 automakers and foreign companies are stepping up production at U.S. assembly plants that rely mainly on clusters of regional supplies but also have sizable import supply chains. Aftermarket sales, meanwhile, are thriving. The average age of cars and light trucks on the road last year was a record 10.8 years.
Furniture imports, which account for 10 percent of U.S. containerized imports, rose 5 percent in December but dropped 1.1 percent to 1.7 million TEUs for the full year. The late-2011 uptick stemmed from early signs of a stabilizing housing market, Moreno said. Furniture imports and sales track housing demand.
“A pickup in sales of existing homes gives hope for a continuation of a rebounding furniture import trade in 2012, but a sharp decline of brand-new home sales in December reminds us of the fragility of this highly important housing recovery,” he said.
Last year was the worst for single-family housing permits and starts in more than 50 years of government statistics. Single-family permits, although depressed, climbed in December to their highest level in 12 months.
Analysts expect the housing market to start to improve this year as construction revives to meet pent-up demand. IHS Global Insight projects multifamily housing starts will rise from 177,000 units in 2011 to 273,000 this year, and single-family starts will rise from 429,000 in 2011 to 454,000.
Volume trends for other top import commodities were mixed. Besides autos and furniture, commodities posting double-digit gains in December included beer and ale, up 24 percent year-over-year; miscellaneous metalware, up 17 percent; and bananas, up 15 percent. Commodities showing declines included toys, down 18 percent; sheets, towels and blankets, down 15 percent; women’s and infants’ apparel, down 11 percent; and computers, down 10 percent.
Those numbers indicate that with household budgets still under stress, consumers remain cautious about discretionary spending, Moreno said. Containerized imports of toys, for example, fell 8.9 percent to 583,101 TEUs last year.
Toymaker Mattel’s 2011 operating profit rose 15 percent, while revenue increased 7 percent, largely from strong international sales in regions such as Latin America, where sales jumped 14 percent. CEO Bryan G. Stockton told analysts the company expects healthy 2012 sales despite an uncertain economy.
“As we look at 2012, we think it’s going to be another year where consumers are going to be a little cautious and retailers are going to be a little cautious because we’ve got economic concerns out there … There’s a lot of reasons, I think, for the macro environment in 2012 to be not that different from the macro environment in 2011,” he said.
Apparel imports last year declined 4.3 percent to 729,298 TEUs. Data this year point to gradual increases in apparel retailers’ revenues. The International Council of Shopping Centers reported sales up 4.8 percent in January in stores open at least a year. As in previous months, the strongest performers were retailers at the high and low ends of the price scale.
Employment numbers, which are off to a strong start, will strongly influence this year’s import demand. The Labor Department reported nonfarm payrolls rose 243,000 in January, the largest increase since April. The official unemployment rate dipped from 8.5 percent to 8.3 percent, the lowest since early 2009.