Merchandise imports are projected to show year-over-year monthly increases at least through August as trade tensions with China ease somewhat, but growth will be slower than last year, only about 1.8-3.7 percent, according to three estimates.
“Retailers are starting to stock up in anticipation of a strong summer,” said Jonathan Gold, vice president for supply chain and Customs policy at the National Retail Federation (NRF). “Tariff increases are on hold and progress is being reported in talks between the United States and China, so the imports we’re seeing now are driven primarily by expectations for consumer demand.”
The NRF projects in the first half of 2019 that US imports will increase 3.7 percent year over year. Merchandise imports are the largest component of the US import trade with Asia. Carriers and their customers are in the final few weeks of annual service contract negotiations, most of which will run from May 1 through April 30, 2020. Carriers and beneficial cargo owners will be looking at both demand (cargo volumes) and supply (available vessel capacity), which are projected to be in relative balance this year in the eastbound trans-Pacific, as crucial elements in determining freight rates during negotiations.
The Global Port Tracker, published by the NRF and Hackett Associates, estimated that US imports in March increased 5.9 percent from March 2018. The report, which forecasts imports six months out, projects year-over-year increases of 6.9 percent in April, 4 percent in May, 2 percent in June, 2.9 percent in July, and 4.3 percent in August. The August imports of 1.97 million TEU would be the highest monthly imports since last October.
The Global Port Tracker’s projections are more optimistic than those of some other industry analysts, however.
Melissa Peralta, senior economist and forecaster at TTX, told the Port of Long Beach Pulse of the Ports symposium last month imports are projected to increase 1.8 percent in 2019. Daniel Hackett, partner, Hackett Associates, told a JOC.com webinar on Feb. 21 imports in 2019 are projected to increase 2.5 percent over 2018. These projections are compared with unusually strong growth last year driven by front-loading of imports ahead of 10 percent Trump administration tariffs on imports from China in September and a proposed jump to 25 percent on Jan. 1, 2020.
Gold told JOC.com Monday retailers anticipate positive sales in a growing US economy. However, growth numbers in the final quarter of this year will be especially challenged compared to with unusually strong fourth quarter last year. US imports in December surged 21.8 percent year over year, according to PIERS, a JOC.com sister product within IHS Markit. The US tariffs were postponed to March 1 and remain an open question as US and Chinese negotiators continue trade talks.
US imports in January and February declined 1 percent from the first two months last year, with imports from Asia down 6.9 percent, according to PIERS, due primarily to the 2018 front-loading of spring merchandise and the timing of factory closures in Asia for the Lunar New Year, which was earlier this year than last year.
But despite the tariff uncertainties and slowing automobile sales and housing starts this year, consumer spending is still strong, according to Ben Hackett, founder of Hackett Associates. “The US consumer, while more cautious, has not stopped spending,” he said. “The inventory-to-sales ratio, however, is on the rise. Part of this can be attributed to the heavy front-loading of imports ahead of expected tariff increases that took place in 2018.”
Source :- joc.com