Investors in the container industry are likely to see disappointing returns in the coming years as Asia’s export growth rates slow now that the outsourcing production from Europe and the U.S. has reached maturity, one analyst firm says.
Asian export growth of 11 percent could be expected this year before slowing to 7 percent in 2013, Macquarie Securities said in its latest Asia strategy report.
Macquarie said the entry of China into the WTO had spurred much of the remarkable growth in container trade over 2002-08 when production was outsourced to Asia from Europe and North America and the complexity of supply chains within Asia increased. But the link between container volume growth and GDP growth will likely wane in the coming years because the trend of outsourcing production to Asia has reached maturity.
“The ratio between container traffic and GDP increased only marginally between the third quarter of 2008 and fourth quarter of 2011, something that has largely been obscured by the volatility in trade volumes seen during this period,” Macquarie said.
“We believe this more gradual uplift is consistent with what can be expected during future years.”
Investors and industry participants should expect container volume growth on the world’s two most important head-haul routes of Asia-Europe and Asia-North America to disappoint in the next few years when GDP multiples could even decline on main line trades.
“While some may consider this expectation to be pessimistic, the conclusion may appear more reasonable when one considers that head-haul volumes in both the Asia-Europe and the trans-Pacific trades have yet to exceed the levels seen prior to the 2008 downturn,” the report said.
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