U.S. container trade is growing at two speeds. Export volume is soaring while consumer-driven imports are rising more slowly.
“Imports are being affected by the economy and the impact of rising prices on consumer demand, but the global rebound in manufacturing and the weak dollar are making this a very strong year for exports,” said Mario O. Moreno, economist for The Journal of Commerce and its sister company PIERS.
Moreno lowered his growth forecast for imports this year to 4.6 percent from the 6.7 percent he predicted three months ago. He raised his forecast for export growth to 10 percent from 8.3 percent.
“The weak dollar has helped U.S. exports to shine,” Moreno said.
PIERS data show U.S. containerized exports jumped 11.6 percent in the first quarter, topping 3 million 20-foot equivalent units, just below the record quarterly high of 3,033,019 TEUs in the second quarter of 2008.
Recovery in global manufacturing is boosting demand for U.S. exports of recycled paper and scrap metal. The dollar’s 5 percent decline this year against a basket of major currencies has made U.S. commodity exports more competitive with other nations’ suppliers.
Besides wastepaper and scrap, export commodities boosted by the weaker dollar include chemicals and agricultural products. Containerized exports of grain, though still tiny in comparison with bulk shipments, have continued double-digit gains despite low rates for bulk carriers.
Import growth is slowing, but Moreno projects next year’s containerized imports to hit 18.5 million TEUs, a 6 percent increase from his revised forecast for this year and close to the record 18.6 million TEUs in 2006. For 2013, he forecasts a 6.6 percent gain to 19.7 million TEUs.
Moreno and others say the normal increase in the second half of the year will be tempered by high fuel prices, commodity inflation, a U.S. unemployment rate that remains about 9 percent and a housing market stuck in the doldrums.
Imports of retail goods are tied to demand by consumers, millions of whom are still reordering their finances after a years-long spending spree that was fueled by easy credit and rising home equity. Bank credit is starting to loosen, but mortgage lenders remain cautious as housing prices continue to slump.
Consumers have dusted off their credit cards but remain cautions, said Nigel Gault, chief U.S. economist at IHS Global Insight. He said recovery in retail sales “will raise the growth rate of consumer goods imports, but not to anywhere near what we saw during the boom.”
Retail sales rose in April for the 10th straight month, the Commerce Department said.
Despite that, the National Retail Federation expects imports through the 10 busiest U.S. container ports to level off this summer before picking up with the August start of the annual peak season for holiday shipments.
Slowing import growth rates stem partly from increasingly tougher year-to-year comparisons. Import volumes in TEUs rebounded 14.3 percent last year after a 15.1 percent plunge in 2009, according to PIERS.
Although no one seems to be forecasting a drop in import volume, major retailers offered mixed outlooks in their latest round of earnings reports in May. High-end retailers such as Nordstrom’s and Saks Fifth Avenue reported robust first-quarter sales growth. Wal-Mart, Target and other mass merchandisers said their key customers are feeling the effects of higher prices for gasoline and consumer goods and continued weakness in jobs and housing.
“While the U.S. economy is showing some signs of improvement, we expect the recovery will continue to be slow and uneven, particularly for more moderate-income households,” Target CEO Gregg Steinhafel told analysts.
Wal-Mart CEO Mike Duke said the largest retailer is seeing weaker sales before the end of the month when money is tight, followed by a spike in buying at the start of the month when customers receive paychecks or government assistance. Wal-Mart, Lowe’s, J.C. Penney and other retailers say they’re seeing customers consolidating shopping trips to save on gasoline.
Home improvement retailer Lowe’s said its sales traditionally have divided 60-40 between maintenance and discretionary projects. Since the recession, that ratio has shifted closer to 70-30 as consumers have trimmed unnecessary purchases.
“Customers may feel better about their employment situation, but are uneasy due to higher fuel, clothing and food costs as well as geopolitical issues around the world,” Lowe’s CEO Robert Niblock said. “Decreasing home prices and low housing turnover mean consumers remain cautious when it comes to big-ticket discretionary spending on their homes.”
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